Your Insurance Premium

At AA Insurance, we know that trust is important because you’re buying a promise. We strive to make things as easy as possible for our customers - that’s why we’ve decided to display your previous year’s premium alongside your new one on policy documents. We’ve also put together some information on what factors can influence your premium from year to year.

What is an annualised premium?

If you have made changes to your policy in the last 12 months, when we refer to an amount from ‘last year’ on your renewal notice, it may not be the amount you paid. To provide a more useful comparison, we are showing you an amount for your cover as of your most recent change. For example, if you have changed your vehicle cover from Comprehensive to Third Party cover, we’re showing what your annual premium would have been last year if you had Third Party cover from the beginning of your last policy term.

If you haven’t made any changes to your cover, when we refer to the amount from ‘last year’, this should match the premium paid for the previous policy term.

If you pay by direct debit, your ‘last year’s premium’ displayed on your notice will be based on the number of instalment payments for the coming year so you can compare premiums like for like.  For example, if you paid 25 instalments last year, and you have 26 this year, your last year’s premium displayed will be based on 26 payments.

This is calculated as: Last year’s premium = Annual premium / number of instalments for upcoming year.

What influences premium?

As well as ensuring we’re collecting enough in premiums to remain a sustainable business, we also aim to set prices as fairly as possible for our customers. This means striking a balance between pricing policies for specific risk versus pooling that risk and spreading the cost to make insurance more affordable across the board.

We are continually checking our pricing against factors like the number of claims we experience, improved data and changes to the cost of running our business. So each year your premium is likely to change even if your personal circumstances haven’t.

A premium may change depending on the total amount of claims we receive each year. If we receive more claims than planned for, or these cost more than expected, premiums may rise accordingly so we can continue to help customers in their time of need.

After we have calculated your base premium, any applicable taxes and levies are applied including GST, Earthquake Commission and Fire Service levies, which we collect on behalf of the government.

Part of the premium we collect from our customers goes towards paying our own insurance premium to reinsurance providers. This is additional cover we purchase to protect us against exposure to large scale events such as storms, floods and earthquakes. This helps us maintain our ability to payout claims. As the cost of our reinsurance changes, so too could your insurance premium.

Like any business, we have expenses and operating costs that enable us to service our customers. We invest in the technology and products that we believe will enhance our customer experience. We also need to make a profit to ensure we can continue running our business year after year, and this can vary significantly depending on large scale events.

The following general information is relevant to AA Insurance home, contents & landlord insurance, and car (including motorcycle & caravan/trailer) insurance, unless otherwise stated. Please refer to relevant policy documents for more detail.



What impacts my home and/or contents premium?

What impacts my car premium?

Concerned about the cost of your insurance?

Here are some ways to save on your premium

Consider how you pay – you can choose to pay your premium annually or spread the cost by fortnightly or monthly direct debit. You’ll pay less if you pay one annual lump sum.

Get a Multi Policy Discount – by having two or more policies with us. 

Choose a higher excess – depending on what you think is manageable for your budget. There are different excess options available, should you need to make a claim, and generally the larger the excess, the smaller the premium.

Review your benefits – and remove those you don’t need anymore. For example;

  • If you have access to another vehicle, you may wish to remove the rental car option from your comprehensive car policy.
  • You may decide you don’t want the excess-free glass option for your home policy.

Check your home sum insured – use our online calculator to make sure you have the right level of cover to rebuild your property should you need to. If you have insured more than it would cost, you may be paying more than necessary.

Check your contents sum insured – use our online calculator to make sure you have the right level of cover to replace your contents should you need to. If you have downsized since setting up your policy, you may be paying more than necessary. It’s also important your sum insured is updated when you accumulate more items, so you’re not caught short in the event you need to claim.

Ensure your property is secure – For your contents, a security alarm will help you save on your premium.

Use your AA Membership – AA Members get a discount on insurance premiums with AA Insurance. The discount increases the longer you’ve been a Member.

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