AAMI cops $43,200 fine for ‘misleading’ claims on ads

Insurer AAMI has been hit with a $43,200 fine from ASIC for making false or misleading statements in its advertisements for its home insurance offering.

The ads, which appear on the insurer’s website and on the radio, stated AAMI would “repair or rebuild the insured house, no matter the cost to AAMI”.

AAMI’s Ketut and Rhonda

ASIC expressed concern with the ads, arguing the statements were misleading because the insurer gave the impression it would always repair or rebuild a house when a claim was made.

“The statements were misleading because they did not disclose that, while AAMI could choose to arrange the repair or rebuild of the insured house, it could also choose to pay the policyholder the assessed cost of repairing or rebuilding the house, leaving the policyholder to arrange the repair or rebuild,” ASIC stated.

Peter Kell, acting chair of ASIC, said: “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.”

The ads for AAMI’s Home Building Insurance ‘Complete Replacement Cover’ included its ‘Not Very Insurancey’ campaign .

At the conclusion of the ad a voiceover stated “any complete replacement cover can help you, which is to repair or rebuild your house as it was or pay you the cash equivalent”.

The television versions, however, escaped ASIC’s ire, as the ads stated the insurer had the option of paying the policyholder.

AAMI has now altered its ad.


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