Existing home policies switch to Sum Insured

Existing home policies switch to Sum Insured

Auckland – 11 June 2013 – AA Insurance has announced that existing home policies will officially switch to the new Sum Insured cover from 1 July upon renewal.

Sum Insured still covers the replacement of the home, but asks the homeowner to provide their insurer with the cost to rebuild their home, called the Sum Insured, which is the maximum amount payable in the event of a claim.

“After being New Zealand’s first insurer to offer new home policies based on Sum Insured last December, New Zealanders are adapting well to the new responsibility, with many considering the cost to rebuild their home well in advance of when their policy renews,” says Suzanne Wolton, Head of Customer Relations, AA Insurance. “The switch to Sum Insured will happen when your existing policy comes up for renewal. For example, if your policy doesn’t renew until 1 October, then that’s when you’ll change to Sum Insured.

“Our customers are in the best position to know the details of their own home – the quality of fittings, slope of the land, or what the house is made of – so they understand why they should determine what it would cost to rebuild it.”

AA Insurance is supporting the change with a range of information and tools including a simple explanation of the changes on its website and a link to a user-friendly online building calculator to help determine the Sum Insured.

“While customers were initially a bit nervous about this new responsibility, they’re finding the Cordell Online Calculator, which is linked on our website, a lot simpler to use than they expected. They also feel comfortable deciding whether the figure provided is right for them to use as the Sum Insured for their home, or if they should contract a building expert instead,” continued Suzanne.

Cordell is an independent company that provides building replacement cost calculators that have been in use overseas for several years. It has created a New Zealand version of its building calculator, using industry research to provide estimated building replacement costs. The Cordell Online Calculator has been tailored to suit the type of information AA Insurance needs for the policies offered. This means the questions you’re asked by the online calculator linked to the AA Insurance website may differ slightly from similar calculators provided by other insurers.

“Cordell doesn’t take into account all of the details of a home – only the details and information it asks you about,” says Suzanne. “So, if your home is unusual, or you haven’t been asked about a significant feature of your home, or you want advice on the cost of replacing your home, you should contract a building expert to help estimate your Sum Insured.”

The majority of existing AA Insurance customers shouldn’t notice any significant difference in their premium costs as a result of the change. However if they do, it will be because the Sum Insured better reflects the maximum amount AA Insurance could have to spend in the event of a claim.

“Even if your home policy isn’t renewing soon, it may pay for you to consider your Sum Insured by using an online calculator or by talking to an expert soon, so you can better understand the implications of Sum Insured for your home. It’s an important decision and worth taking the time to get right,” adds Suzanne.

ENDS

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