Major insurers across the motu are ditching their multi-policy discounts. Instead, they are beginning to offer “more personalised pricing” to their customers.
AA Insurance, AMi, State, and Vero are some of the big names who have announced changes to the multi-policy discount offerings.
AA Insurance cancelled its multi-policy discount from January 28th for new policies. Existing policy holders will lose the discount when they renew their policies. Meanwhile, AMI stopped offering multi-policy discounts on home, contents, and landlord policies from August 2024, and for renewals from October 26. State Insurance dropped its multi-policy discount for new policies in March 2024, and for renewals from May 27. Vero has said effective from May 1 this year, multi-policy discounts will no longer be offered on ANZ Asset Protector Home, contents or motor vehicle insurance policies.
Rebecca Styles from Consumer NZ said that these changes are likely a result of regulatory action and the rise in risk-based pricing.
“Basically, the dropping of discounts could be because of two factors: increasing use of risk-based pricing at properties, and the Financial Markets Authority (FMA) action brought against insurers in recent years for not applying discounts properly,” she said.
According to Styles, insurers have claimed the lack of discounts meant customers would get a fairer price upfront.
“While we haven’t got a clear answer from insurers about what this actually means, we think it’s because the price for house insurance, in particular, is based on increasingly sophisticated natural hazard risk data available for individual properties.”
For homeowners in low risk areas, Consumer NZ said this could lower insurance premiums better than the discount did. However, high-risk homes and homeowners could likely pay more.
Consumer NZ said that the lack of discounts should prevent loyalty to one provider for all your insurance needs. Therefore, it can be a really good reason to diversify where you get your insurances from. Compare policies with Money Compare to ensure you are getting the better deal!
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