AA contents insurance claim - disagreement about phone value

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Basilcat

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#208417 10-Feb-2017 21:44

Just looking for peoples thoughts on this.

My sister has completely wrecked her iPhone 6 64GB she bought August 2015 in America for around $815 USD ~$1115NZD and is in the process of making a claim with AA.

AA has said that since that model is no longer in production they will only pay out the value of the phone if it were bought second hand which is $759 according to them.

As far as I'm aware Vodafone is the only place in NZ still selling not parallel imported iPhone 6's for $899, but only 16GB. With usual Apple pricing this means a 64Gb would be around $1099

If Vodafone still sells them then I feel that is the value that AA should be paying, or that of the next model up, a 32GB iPhone 6S which retails for $999.

This is our policy

"Replacing the item

Where we consider that there is a nearest equivalent item available we will: • replace the item with the nearest equivalent item, or • make a payment to you in the form of cash, voucher or store credit for the replacement value of the item.

Paying the Market Value

We may determine that there is no suitable nearest equivalent item available and we will settle those claims on the basis of the Market Value of the item. There are certain other items that will always be settled on the basis of the Market Value including all clothing, footwear and cosmetics. Where we settle your claim at Market Value we will make a payment to you in the form of cash, voucher or store credit for the Market Value of the item."

Anyone have their two cents to add?

kingjj

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#1718523 11-Feb-2017 01:24

When I made a claim for my last phone (accidental damage) the insurer (not AA) replaced it with the nearest equivalent model which happened to be 2 generations later (the most current) and double the storage size (as smaller size phased out). I'm quite surprised that AA won't do the same, especially for such a premium phone. It seems perfectly reasonable that the nearest equivalent item would be the next model on sale with the same storage size.

I guess your sister could make a complaint to the Ombudsman if she is unhappy with how AA have handled her claim.

mattwnz

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#1718524 11-Feb-2017 01:34

You probably need to look up their definition, as to what their definition of equivalent means. It really all comes down to that. Potentially an equivalent product could be a newer model, if it is very similar. As the 6 and 6s are very similar anyway, and look identical, it could potentially be equivalent. It doesn't say that equivalent must be the 'identical', otherwise wouldn't it say 'identical' . But it all comes down to the insurers definitions in their fine-print. But it doesn't sound like the worst outcome, considering the age of the phone, and if they are giving you cash. Potentially you could get something newer and better with the cash on sale.

DjShadow

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#1718526 11-Feb-2017 01:55

I would of thought with "New for Old" that if you have a phone that is no longer made that they would give you the equivalent of the current generation of the phone

i.e if I had a busted iphone 4, I would get a iphone 7

cshwone

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#1718527 11-Feb-2017 06:58

In their T&C for replacing an item that you posted it seems that there can be two outcomes to either replace with an equivalent OR give you what the deem to be the value of a replacement.

Obviously they have gone for the cheaper option for them which is the latter option. So hate to say it but I don't see much in the way of grounds for redress.

antoniosk

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#1718538 11-Feb-2017 08:39

It appears there is no nearest equivalent item; there are no 64gb iphone's available as replacement. 32gb is inferior; 128gb is not that equivalent in that it costs more. What a horrible conundrum.

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froob

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#1718546 11-Feb-2017 08:52

From what you've posted, it seems that there are certain items under the policy that will always be settled on market value. The list is not exhaustive, so the first thing to do would be to check whether mobile phones are also in that category.

If they are not, then my thinking is that you should set out in writing to AA that you consider the iPhone 6S 32GB is equivalent. Include some comparative photos and specs, and details of the pricing from Vodafone (e.g. a print out of their website). Ask them to provide details in writing if they disagree with your assessment. Be polite but firm in your position, and try not to get frustrated if they don't give you the answer you want.

As above, you should have a look at the definition of "nearest equivalent item" in the policy. Also, be aware that there might be other parts of your policy terms that have an impact on the claim, that they might raise.

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Geese

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#1718556 11-Feb-2017 09:33

I had an AA contents claim for burglary. All the items were small electronic items. They replaced for identical item if sold by their suppliers in NZ. If it wasn't available or was outdated model, it would be replaced with item of same specs, however a more superior item would be substituted if specs couldn't be matched - ie if a 200W inverter was taken and the current models step from 150W to 400W, they would replace with higher value. There was also scope for upgrades as they would, say for a camera say to replace it would be $160, so i could take that $160 as a voucher and upgrade to the next step up camera or as i did, add value of smaller items together and buy something more useful with the vouchers.

The only complaint if you want to call it that about the process was I identified all the items very specifically, but total settlement took 1 month.

I don't know anything about iphones so don't want to comment on them but there were instances were an item was still available new in NZ but it wasn't at one of their suppliers, ie their chosen chain stores, so from memory i think i had to substitute those items for an equivalent.

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nitrotech

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#1718565 11-Feb-2017 10:25

2 degrees still sell the 6 and the 64gb looks like it's $899

https://www.2degreesmobile.co.nz/mobile/iphone/iphone6/

cadman

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#1718623 11-Feb-2017 12:08

DjShadow:

I would of thought with "New for Old" that if you have a phone that is no longer made that they would give you the equivalent of the current generation of the phone

i.e if I had a busted iphone 4, I would get a iphone 7

That would be considered betterment and insurers don't do that because it encourages claims to upgrade.

froob

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#1718627 11-Feb-2017 12:15

cadman:
DjShadow:

I would of thought with "New for Old" that if you have a phone that is no longer made that they would give you the equivalent of the current generation of the phone

i.e if I had a busted iphone 4, I would get a iphone 7

That would be considered betterment and insurers don't do that because it encourages claims to upgrade.

From the looks of it, the OP has a "replacement value" contents policy, with some exceptions. Replacement value typically has betterment built-in (i.e. you had an old item, you get a new item).

Indemnity policies are where you are put back into the same position as you were in - i.e. no betterment.

http://www.icnz.org.nz/for-consumers/domestic-insurance/replacement-vs-indemnity-insurance/

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cadman

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#1718629 11-Feb-2017 12:32

froob:
cadman:

DjShadow:

I would of thought with "New for Old" that if you have a phone that is no longer made that they would give you the equivalent of the current generation of the phone

i.e if I had a busted iphone 4, I would get a iphone 7

That would be considered betterment and insurers don't do that because it encourages claims to upgrade.

From the looks of it, the OP has a "replacement value" contents policy, with some exceptions. Replacement value typically has betterment built-in (i.e. you had an old item, you get a new item).

Indemnity policies are where you are put back into the same position as you were in - i.e. no betterment.

http://www.icnz.org.nz/for-consumers/domestic-insurance/replacement-vs-indemnity-insurance/

Phones are is almost always exceptions to replacement.

froob

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#1718632 11-Feb-2017 12:57

cadman: Phones are is almost always exceptions to replacement.

Agree it's something the OP should definitely investigate as a first step, as above.

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Basilcat

12 posts

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#1718644 11-Feb-2017 13:27

nitrotech:

2 degrees still sell the 6 and the 64gb looks like it's $899

https://www.2degreesmobile.co.nz/mobile/iphone/iphone6/

Thanks for the link. I couldnt find it with 2DG previously

Basilcat

12 posts

Geek

#1718646 11-Feb-2017 13:48

Thanks everyone for their answers so far.

The courier bag they sent to send the phone away in to get inspected is from PB Tech so I can assume that they are also their supplier and no surprises they don't sell iPhone 6's anymore.

It seems like because their supplier doesn't have iPhone 6's anymore they are going straight to the market value of a secondhand iPhone 6 instead of replace value of a nearest equivalent item which would be a 6 from Vodafone or 2DG or a 6s from anyone including PB tech.

From reading the policy document I cant see any kind of exclusion for smartphones from AA's 'new for old' policy.

New for Old

If something you own is stolen, lost or damaged beyond repair, we’ll replace it with a brand new item, regardless of the age of the original. So if your five year-old TV is stolen, we’ll replace it with an equivalent brand new TV.

This benefit excludes clothing, footwear and cosmetics for which you will be paid the market value. Items that can be repaired may be repaired instead of replaced, and if a suitable new equivalent item isn’t available you will be paid the market value.

Policy definitions

Nearest equivalent item

An item that is readily available in New Zealand with the same features, functions and characteristics, but not the brand or price, of the damaged or lost item.

Replacement value

The retail price of the nearest equivalent item that would be charged to us by our supplier, as if it were new at the time of the event. This amount may take into account any discount available to us from our suppliers.

Market Value

Is the amount necessary to replace the item in New Zealand with an item that is of equivalent age and capability,
with due allowance for age, wear, tear, depreciation, and prior maintenance.

mattwnz

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#1718658 11-Feb-2017 14:13

You wonder why they didn't send to to apple, as they should have been able to replace it straight away with the exact same model, and it would likely have been cheaper for the insurer. They would have replaced it with a refurb, which would be the same as if it had to be replaced under warranty.