Insurers undecided on whether to give car insurance rebates this lockdown
Traffic on the country’s streets has dwindled to a trickle thanks to the national lockdown, but insurers are undecided on whether to give motorists car insurance premium rebates.
During the six-week long national lockdown last year, AA Insurance and Tower gave rebates adding to just under $27 million to policyholders as car crash claims fell dramatically as vehicles sat unused on driveways.
IAG, which owns the State, NZI and AMI brands, opted not to give its customers car insurance rebates during last year’s lockdown.
But all three insurers say it’s too early into the current lockdown to say whether they will decide on a repeat of the 2020 rebates.
AA Insurance spokeswoman Amanda Fifield said: “Last year's lockdown was based on a six-week nationwide lockdown so it’s too early to say what the impact of this lockdown will be.
“Our executive team is constantly monitoring the situation including what we have learned about changes to driving behaviour and repair costs post lockdowns.
“We are committed to letting customers know directly of any updates.”
After the last lockdown, AA Insurance returned $19.5m in rebates to car policy customers.
Tower spokeswoman Emily Davies said: “It’s too early to tell what impact this alert level change will have on our customers and whether a rebate may be appropriate.
“Right now our focus is on our people, on supporting our customers and maintaining all elements of our operations.”
She said: “We are continuously monitoring the situation and once we get through this period, we’ll be able to determine if any action is required.”
After the 2020 lockdown, Tower gave car insurance rebates of $7.2m to customers.
Davies said Tower’s staff were all now working from their homes in Auckland and Rotorua.
It also has staff in Suva in Fiji, a country in which an average of 10 people a day are dying with Covid. They were also working from home.
Kevin Hughes, IAG’s executive general manager for customer and consumer, said: “Our immediate focus has been supporting our people and responding to the needs of our customers during the first few days of lockdown, including those affected by recent weather events.
“Given the level of uncertainty around this outbreak, we are assessing the situation and considering how we best support our customers during this time. How long the lockdown continues will be important,” Hughes said.
“We will continue to do the right thing by our customers, by putting their specific needs at the heart of our response,” he said.
Earlier this month, IAG reported a drop in profit in New Zealand as claims returned to pre-Covid levels.
But while it delivered a New Zealand profit, its Australian parent company reported an overall loss of A$427 million (NZ$448m) to investors on the ASX sharemarket.
It told investors this was a result of paying Covid-related business interruption insurance claims, and having to set aside money in Australia to make refunds to wronged customers, and fix historic payroll failures.
Earlier this month, Suncorp New Zealand, which owns Vero, which in turn owns a majority stake in AA Insurance, announced a 17 per cent drop in profit.
That followed a $45 million spike in extreme weather claims, it said, though its bottom line also took a $15m hit from having to set aside money to compensate customers.