AA Insurance refunding $19.5m to 400,000 motor insurance customers

More than 400,000 motor vehicle insurance customers will receive the refund.
More than 400,000 motor vehicle insurance customers will receive the refund. Photo credit: Getty

AA Insurance has begun issuing $19.5 million in refunds to customers due to a reduced likelihood of claims during the COVID-19 lockdown.

More than 400,000 customers who held a motor policy and paid their premiums between March 24 and May 13 will receive the rebate before the end of September.

AA Insurance CEO Chris Curtin said with Kiwis holed up at home for nearly two months during the COVID-19 lockdown, there were fewer vehicles taking to the roads and a reduced number of motor insurance claims.

Curtin said they wanted to give back to customers, many of whom have been affected by the economic impacts of the pandemic.

"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.

"We hope these premium rebates go some way to helping customers who've been financially impacted by COVID-19."

For most customers, the rebate would be about 42 percent of the premium they paid during the lockdown period.

Those with AA Insurance's comprehensive motor policy would get a rebate of about $40. This also includes people with insurance on their caravans, trailers, motorcycles, classic vehicles and motorhomes.

Along with the refund, AA Insurance has also created a $2 million hardship fund and frozen premium increases across personal motor, home and contents products. Customers who were helped by the fund may not qualify for the full premium rebate.