AA Insurance begins $19.5 million car insurance refunds
Wednesday, 5 August 2020
AA Insurance has begun to refund more than $19.5 million to 400,000 motor insurance customers.
During Covid-19 lockdown, households drove less, resulting in fewer crash claims, and a windfall for insurers, AA Insurance chief executive Chris Curtin said.
AA Insurance and Tower pledged to return Covid-19 lockdown-related windfall gains to customers.
Tower began refunding $7.2m in July, while rival insurers State, AMI and NZI have stayed silent on whether they would follow suit.
**READ MORE:
* Consumer NZ: More clarity needed on insurance cost, benefit
* Tower to refund $7.2m due to reduced car claims in lockdown
* Australian-owned insurer under fire for hiking NZ car premiums
**
Curtin said that customers would be refunded a portion of the motor premiums they paid during the alert level 3 and the level 4 lockdown.
“Premiums are calculated in advance, however, after seeing the number of motor insurance claims fall because people stayed at home, we wanted to acknowledge this and give back to our customers, so we have reviewed the premiums paid and have started refunding a portion of this back to them,” he said.
He said it was the right thing to do.
For most customers, the rebate would be about 42 per cent of the premium they paid between March 24 and May 13.
People with AA Insurance’s comprehensive motor policy would get a rebate of about $40.
It wasn’t only car drivers who would get rebates. People with insurance on their caravans, trailers, motorcycles, classic vehicles and motorhomes would also get rebates.
Most rebates would be processed by the end of September, Curtin said.
“We hope these premium rebates go some way to helping customers who’ve been financially impacted by Covid-19,” Curtin said.
As well as pledging to return any windfall profit, AA Insurance also set up a $2m hardship fund to help policyholders who had lost income as a result of the Covid-19 restrictions, and were struggling to pay their premiums.
Some customers who received hardship support may not qualify for the whole rebate, AA Insurance said.
Australian competitor IAG has not said whether policyholders with its AMI, NZI and State insurance brands would be given premium rebates.
IAG did, however, issue a statement in April in which it said: “It’s our intention that any additional benefits arising from the Covid-19 lockdown and travel restrictions will ultimately flow through to our customers.”
But customers who have emailed IAG companies have been told not to expect rebates.
One AMI customer received this response when he asked about whether he would be getting a rebate: “Thank you for contacting AMI. We understand that AA and Tower insurance is giving rebates for their customers. However, we're not able to offer premium rebate.”