The cost of your insurance is made up of several components:
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The AA Insurance premium, which takes into account what you're insuring and any costs we anticipate, based on our past claims data.
For example, a home insurance premium considers:- the size of your home,
- the materials that your home is made of and the associated cost,
- when your home was built,
- information about the people covered by the policy and their age, and
- where your home is located in the country and whether there is any associated weather or storm-related risk, for example, we may use third party data to try to predict what claims may cost us for certain types of damage e.g., severe weather events such as storms and floods.
A car insurance premium, for example, may factor in:
- the year, make and model of your car and the associated cost of replacing any parts,
- the agreed value of your car,
- and the drivers listed on your policy and their age,
- where your car is located in the country and whether there is a higher incidence of theft and vandalism or if you are in a higher populated area with more traffic,
- your own claims history.
- The second component is reinsurance costs. This is additional financial cover that enables us to make sure there are enough funds to pay all insurance claims in the case of a large-scale event. These reinsurance costs, along with the AA Insurance premiums, make up your base premium.
- The final component is taxes, fees and levies collected by all insurance companies on behalf of the government. For example GST, the Fire and Emergency New Zealand (FENZ) levy and Natural Hazards Insurance (NHI) levy.