While we do take into account any car insurance claims you may make over your policy term, this is only one of many factors that goes towards your premium. The premium you pay can be influenced by a range of factors, including your location, the type of car you own, the number and types of claims we receive and more. Another portion of your premium goes towards taxes and levies that we collect on behalf of Government agencies.
Part of the premium we charge also goes towards paying our own insurance premium for reinsurance. Recently, increasing reinsurance costs have impacted premiums across the insurance industry. This has been influenced by the significant number of claims we received this past year due to extreme weather events, including the North Island floods and Cyclone Gabrielle. As a result of these types of events, and even past events such as earthquakes, reinsurers are changing how they view New Zealand and the costs being charged to insurers, which means AA Insurance’s reinsurance costs have increased significantly.
Additionally, there have been significant delays in obtaining parts to repair cars. With more demand for parts across the industry, and difficulty in obtaining them, the cost of parts has increased. This all means that the time and cost to resolve our car insurance claims has been impacted and the cost of claims has substantially increased.
We strive to keep premiums as competitive as possible, however, many of our costs relate to factors beyond our control, especially the number and cost of claims we receive. This means that each year your premium can change, even if your personal circumstances haven’t.