Kiwis in poorer areas charged 40% more for insurance – study
Kiwis in poorer areas charged 40% more for insurance – study | Insurance Business New Zealand
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Kiwis in poorer areas charged 40% more for insurance – study
Three low-prosperity areas have the most expensive insurance in Auckland
Insurance News
By
Kenneth Araullo
A study revealed that Kiwis in poorer areas in Auckland were charged as much as 40% more for contents insurance than their least expensive counterparts. Tackling the issue of “poverty premium,” the new research collected data from 21 local board areas in Auckland and found that contents insurance prices in low-prosperity areas were generally more expensive, especially compared to good and high-prosperity areas.
Conducted by Banked NZ, the study also found that all Auckland local board areas that were classified as low-prosperity ranked among the most expensive for contents cover. With insurers using location to determine the cost of insurance, all 21 local areas were grouped in five distinct categories using Auckland Tourism, Events and Economic Development’s (ATEED) 2020 Auckland Prosperity Index: high, good, moderate, poor, and outlying.
Manurewa (low)
Papakura (low)
Ōtara-Papatoetoe (low)
Puketāpapa (good)
Ōrākei (high)
Maungakiekie-Tāmaki (low)
Māngere-Ōtāhuhu (low)
Albert Eden (high)
Howick (good)
Waitemata (high)
Henderson-Massey (moderate)
Whau (moderate)
Upper Harbour (high)
Devonport-Takapuna (high)
Kaipātiki (good)
Hibiscus and Bays (good)
The three highest average quoted prices were in areas of low prosperity. All five low-prosperity areas were ranked in the top seven most expensive contents cover.
Banked NZ postulates that a factor that goes into more expensive insurance for poorer areas is the lack of discounts available. An annual payment discount, which is around 7% on average, cannot be availed by those with less disposable income as they would not likely pay for a full year of insurance in one go. Multi-policy discounts, which can range from around 10% to as much as 20% for three or more policies, fall under the same conundrum.
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