Q&As about premium changes
Answers to your most frequently asked questions about insurance premiums
Why have my premiums increased?
Over the past few years there have been a number of natural disasters across NZ and around the world. These events have not only had an effect on NZ insurers but also global reinsurers who have increased the price of reinsurance to reflect the losses they have suffered and to take account of the increased likelihood of catastrophe events occurring.
AMI's premiums reflect the current costs of providing insurance cover. Premiums are influenced by a number of factors unique to you as well as the frequency of claims and average costs per claim.
We believe AMI premiums remain competitive and that you continue to receive excellent value for money.
We try to keep premium increases to a minimum and you can talk to us about ways to save on your insurance.
What's affecting car insurance premiums?
Car insurance premiums are being impacted by two main factors:
- More claims - primarily because there are more cars on the road and driver distraction due to in-car devices;
- The average cost per claim is higher – vehicle technology e.g. sensors and intelligent braking systems, has led to a higher repair / replacement cost.
What's affecting house insurance premiums?
House insurance premiums are being impacted by two main factors:
- More claims – due to the number of natural disasters over the last few years ;
- The average cost per claim is higher – repair / replacement costs are impacted by higher building costs.
What's affecting contents insurance premiums?
Contents insurance premiums are being impacted by two main factors:
- More claims – because we own more stuff so there are more opportunities for things to get lost, broken or stolen;
- The average cost per claim is higher – technology improvements e.g. mobile phones, hearing aids etc. impact costs.
Why has the cost of reinsurance increased?
Reinsurers have not only been impacted by the Canterbury earthquakes, but also by events such as Japan’s tsunami, the Queensland floods and storms in the US.
Reinsurers have increased their premiums to account for the greater understanding of claims costs associated with recovering from these events, as well as the higher risk of natural disasters occurring in the future. The insurance industry in New Zealand, including AMI, has been impacted by these increased costs.
Why is the EQC levy included in my premium?
A proportion of your house insurance premium is actually made up of levies and taxes collected on behalf of others: The Fire and Emergency Levy, EQC levy and GST.
If you have house or contents insurance in New Zealand, the EQC provides first cover for earthquake and landslide damage to your house, contents and land. It is part of your overall insurance cover while being provided by EQC and charged for by them. AMI is required to collect these levies by legislation.
What are you doing to keep costs down?
AMI is very conscious of the cost of insurance, and the impact of premium increases on our customers. As a result we focus on being efficient and not incurring unnecessary costs in operating the AMI business.
Will other insurance companies be increasing their premiums?
We are unable to comment on other insurance company premiums, however, the whole insurance industry will be affected by increased reinsurance costs.
Even though we have increased our premiums, we are committed to keeping insurance affordable and our premiums competitive.
I have never made a claim, why are my premiums increasing?
The premium increase is applied to all AMI policies, regardless of whether you have made a claim or not. Your premium ensures we remain a strong and sustainable business able to meet your needs.
AMI premiums remain competitive and we reward customers for not making claims through freeBmax, our Maximum No Claims Bonus protection, and No Claim Bonus.
I would like to make some savings on my insurance, what should I do?
Having insurance is vital to help families and individuals overcome the financial impact of unexpected events.
There are different levels of insurance and types of policies that can be considered, as well as different payment and excess options available to help meet your personal circumstances. It is important to discuss these options with us so that you are not caught out when the unexpected happens.
Please contact us on 0800 100 200 or visit your nearest branch for more information.
Should I contact AMI to help work out the best insurance option for me?
Yes. You can contact us on 0800 100 200 to discuss the best insurance option for you or visit us at one of our branches across New Zealand. We will be happy to assist you.
What about other brands within the IAG group?
Different brands need to make different increases depending on the way the company operates, its insurance mix and current pricing of policies. The increases from one brand to another may vary as a result, but all IAG brands share the objective of keeping insurance affordable and minimising premium increases where possible.
What about customers in Canterbury?
The same cost challenges apply across our business, and across the insurance sector but at that same time we recognise the particular situation of our Canterbury customers, and also the Deed of Undertaking that IAG entered into as part of the purchase agreement for AMI. This means AMI Canterbury customers will not be disadvantaged relative to customers of other IAG brands.
In coming months, like other insurance customers in New Zealand, Canterbury customers will face premium increases inline with the risk and reinsurance costs attributed to the region where the risk is located.