AA Insurance has begun the process of returning $19.5 million to its customers, due to the lowered likelihood of motor insurance claims during the COVID-19 lockdown period.
According to a statement from the insurer, all eligible customers will be refunded a portion of the motor premiums they paid during the Alert Level 3 and 4 lockdowns. This was first announced in April. To calculate the rebates accurately, the company said that it needed to wait until after the end of its financial year, to clearly see the impact of the COVID-19 lockdown.
The rebate is estimated at around 42% of the motor policy premium paid between March 24 and May 13 for most customers. Over 400,000 customers with motor polices – which include cars, caravans, trailers, motorcycles, classic vehicles, and motorhomes – are expected to receive rebates.
AA Insurance will contact customers through email or post, and it expects to issue the majority of the rebates by end-September.
“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,” said AA Insurance CEO Chris Curtin. “This decision is driven by the principles of fairness and doing the right thing by our customers and the communities we live in.”
