Short term insurance is an insurance policy taken out for a short period of time. This insurance policy safe guards you against loss or damage of your assets. An example of short term insurance would be vehicle or home insurance.
If you were to get into a major motor vehicle accident or if the geyser in your home were to burst would you have enough money to repair or replace these damaged assets?
Most people are under the assumption that if their assets were to be damaged or loss they could use their savings to replace or repair these items but the costs of it could be very high. For example, if the geyser in your home were to burst you would have to bear the cost of replacing the geyser, repairing the ceiling as well as replacing the carpets.
Taking out from your savings is not a very economical solution that is why taking out a short term insurance policy is a necessity. It gives you that peace of mind that if your assets were to be damaged or lost due to unforeseen circumstances you would not be financially burdened.