Source: Radio New Zealand
Two customers caught out by large changes in the valuation of their vehicles through AA Insurance say they only realised something was amiss when they went to claim.
RNZ has reported on a number of people who have queried the valuations of their cars through the insurance company in recent months.
One woman, Nicki, was upset that the value of her 24-year-old Subaru had increased two-and-a-half times when the policy renewed this year.
Another said that the value of his 2003 Subaru Forester dropped 58 percent last year and then lifted by 3.67 times this year – to $9900, 10 percent more than he paid for it 11 years ago.
AA said it relied on third-party data to provide vehicle values and from time to time the methodology and data sources were updated.
One person, Chris, who contacted RNZ said their policy renewed in February.
But five days later, the vehicle was hit while stationary and it was only then that they realised the insured value had been reduced by 70 percent. Chris said while the change in premiums was made clear in the information emailed about the renewal, the change in the insured value was more difficult to find.
Another person, Ruby, said the value of her car dropped from $6900 to $1300 at her policy renewal..
“After a lot of back and forth, stressful phone calls, and providing my original purchase receipt, AA eventually reinstated the agreed value of $6900.
“The repair quote for the damage is between $2000 and $3000, so if the policy had remained at $1300, it would have effectively left me without meaningful cover.
“However, AA are now requiring me to back-pay the premium difference for the period where the vehicle should have been insured at the higher agreed value. I’m a single mum on a very tight budget with existing debt, and I’ve been trying to resolve this since the 2nd of January while my car is still damaged and difficult to use. They have just agreed to let me repay the additional premium at $8 per fortnight.”
Karen Stevens, Insurance and Financial Services Ombudsman, said she could not comment on specifics but had received a number of complaints in recent years from people who had not been aware that their vehicle’s value had been reduced by their insurer until they had an accident.
“We always remind people that it’s important to review the new policy schedule every year and, if they’re not happy with the value, to challenge it then rather than later. They can also get a valuation or PAV to show the vehicle is worth more than the insurer says it is.”
Rebecca Styles, Consumer NZ’s insurance specialist, said anyone who had not been advised about a drop in value should challenge it.,
“If someone is advised of a drop in the value of their vehicle and they disagree with it, they can ask for a revised valuation and provide evidence of what they consider to be fair market value.
“It’s also important to check the policy renewal details when they come through to make sure the insured value is appropriate, and to take the opportunity to check how the premium compares with other insurers to make sure you’re getting the best deal.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand