Suncorp Group's AAMI has been forced to pay $43,200 in penalties after corporate watchdog ASIC raised concerns about “false” or “misleading advertisements” relating to its home insurance.
The ads, on both AAMI's website and the radio, promoted the Home Building Insurance 'Complete Replacement Cover' product.
ASIC expressed concern the statements gave the impression that AAMI would itself always take the necessary steps to repair or rebuild a home when a claim was made.
ASIC found the statements to mislead consumers as it did not disclose that AAMI would have the option to pay the policyholder the cost of repairs or rebuilding, leaving the policyholder to arrange the rectification work themselves.
Acting ASIC Chair Peter Kell says it is imperative for insurers to be clear with potential customers about what the insurance covers and how claims will be paid.
"Customers decide to take out a particular type of cover based on what is advertised. While we recognise that AAMI offers a type of home building policy that can help reduce the risk of underinsurance, advertising must not mislead consumers," Kell says.
AAMI amended its advertising after ASIC raised its concerns.
An AAMI spokesperson said: "AAMI has been working with ASIC to review its advertising and disclosure with regards to its Complete Replacement Cover (CRC). CRC is offered as an optional cover under the AAMI Home Building Insurance product. Following this review, AAMI has amended the advertising and will also amend its disclosure to address ASIC’s concerns. With the CRC option, customers are not required to choose their own sum insured which can help reduce the risk of underinsurance."
AAMI’s agency of record is Ogilvy Melbourne but the brand also works with independent creative agency Edge on its social content.
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