Where do car premiums go?

We understand that changes to your premium can be confusing. As a guide we have broken down where insurance premiums go, because it’s important to us that you know where your money is going.

Claims 64%

Naturally, you'd expect one of the largest parts of the premium collected are used to help payout claims. Claims are an important part of what we do to help protect what matters to you.

Government Taxes & Charges 16%

A part of the premium goes towards government taxes and charges. After we have calculated the amount to cover your insurance policy, any applicable stamp duty, GST, charge and levy are then applied.

Reinsurance 2%

A part of the premium collected goes towards paying our insurance premium to reinsurance providers. We purchase additional cover of reinsurance to protect against the exposure to large scale events such as storms, floods and cyclones. This helps us maintain our ability to payout claims.

Profit 3%

Like any business, we need to make a profit to ensure we can continue running our business year after year. Our profit can vary significantly from year to year depending on whether there were large scale events like storms, floods and cyclones.

Expenses 15%

Every business has operating costs that enable them to continue their operations and service their customers. That's why a percentage of the insurance premium goes towards the operating cost of running our business. We also invest in the technologies and products that would improve the services we provide to you.

What data did we use?

The information above is based on data aggregated across all AAI Motor Policies and is calculated based on the period from 1 July 2016 to 30 June 2018. The data may vary from time to time, depending on the measurement period.
AAI Motor Policies mean comprehensive, fire, theft and third party property damage, third party property damage, motorcycle, caravan and motor home policies of all the AAI Brands, issued by AAI Limited and includes policies with all types of optional covers. It does not include boat insurance or motor cover sold under a business policy.
AAI Brands mean AAMI, GIO, Suncorp, Apia, Shannons, Bingle Insurance, CIL Insurance, Vero, InsureMyRide, Just Car Insurance and Essentials by AAI.
Percentages are rounded to the nearest whole number.
This information is intended to be of a general nature and for information purposes only. ‘Where premiums go’ may differ and may change from time to time. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.

What impacts premium?

The below general information is relevant to Apia car (including comprehensive; fire, theft and third party property damage; third party property damage), motorcycle, caravan and motorhome insurance, unless otherwise stated. Please refer to your relevant policy documents for more detail.

Many factors can impact the amount of premium that we charge our customers, some key matters are set out below. In addition to change in circumstances impacting your cover, premiums are also impacted by changes in our pricing practice, pricing factors and how we calculate premium from time to time.

The amount your vehicle is insured for affects your premium. For example, luxury cars can have higher premiums as they cost more to replace as opposed to a less expensive car in the event of a total loss.

The type of vehicle you have has a significant impact on your premium. This is because the cost of replacement parts vary depending on the make and model of vehicle you have.

The place where your vehicle is kept can impact your premium. Generally, a higher population density in an area means more traffic and therefore a higher chance of an incident occurring. Certain areas with higher risk of theft, vandalism and other similar incidents will also affect the premium.

A drivers age and experience can affect the likelihood of having an accident or claim. Generally, more experienced drivers have less accidents.

Excess is the amount you ordinarily have to pay for each incident when you make a claim. If you choose a higher excess, you may be out of pocket more when making a claim. A higher excess reduces our claims cost meaning we can reduce your premium. Higher excess means a lower premium, lower excess means a higher premium.

A premium may change depending on the total amount of claims we receive each year. If we receive more claims than expected, premiums can be impacted.

After we have calculated the amount to cover your insurance policy, any applicable stamp duty, GST, charge and levy are then applied. Government taxes and charges may change from time to time.

How can I review my premium?

Review your policies to make sure all details are correct. Some changes can impact your premium if they affect the premium factors. Below are some ways you can influence how much premium you pay under our suite of motor products. When reviewing your policy, you should always consider your own personal circumstances and check whether your policy suits your own needs.

By increasing your excess it will lower your premium. However, decreasing your excess will mean you will pay a higher premium.

The amount we insure your vehicle for will also impact your premium. When reviewing your amount covered, it’s important to ensure the level is sufficient for your situation.

A number of other factors can impact your premium, including;

What you use your vehicle for? For example, your premium will generally be lower if you use your vehicle for private use compared to business use.
Who drives your vehicle? Age and driving experience of listed drivers can impact your premium.
How many kilometres you travel each year? The more you are on the road, the more chances there are of having an accident therefore your premium will be impacted by how far you travel each year.

If any of the details have changed it’s important to contact us to ensure you have the right level of cover and appropriate premium.

Multi-policy discount - We might offer you a discount for having more than one policy with us. Some policies are not eligible for a discount and whether or not we give you a discount can also depend on the combination of products you hold with us. To find out more about the multi-policy discount, please phone us on 13 50 50.
“Drive Less, Pay Less Discount” (only available for eligible comprehensive car insurance policies) - if you drive less than 20,000 kilometres per year this can lower your car premium.

Discounts are also a factor that can affect your premium. The premium you pay for your insurance includes any discounts we have given you. Any discounts are usually calculated and applied before the application of government taxes and charges.

You should check your relevant policy documentation for information on discounts.

From time to time we might also offer discounts (such as a discount for quoting for and buying your new policy online) or some other special offers as part of a marketing campaign. If we do this, separate terms and conditions may apply, and you might not be eligible for our usual discounts. The amount and type of discount offered can change or be withdrawn.

If you are eligible for more than one discount (such as a discount for quoting for and buying your new policy on-line), we usually apply any subsequent discount to the already discounted premium. Discounts do not apply to the Apia Roadside Assist option and may not apply to other optional covers.

To make changes to your policy, log in online to your account or give us a call on 13 50 50. Online changes are not available for motorcycle, caravan and motor home policies.

Disclaimers:

This information is intended to be of a general nature and for information purposes only. What your premium goes towards may differ and may change from time to time. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.

The information provided is accurate and true as of 1st May 2019, noting we may change our pricing practice (and the premium factors) from time to time.

Australian Pensioners Insurance Agency Pty Limited ABN 14 099 650 996 is an authorised representative of AAI Limited ABN 48 005 297 807, the product issuer for Apia comprehensive; fire, theft and third party property damage; third party property damage, motorcycle, caravan and motorhome insurance. Read the Product Disclosure Statement before buying this insurance. Go to apia.com.au for a copy. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. Various products and services are provided by different entities of the Suncorp Group. The different entities of the Suncorp Group are not responsible for, or liable in respect of, products or services provided by other entities of the Suncorp Group.