How multi-policy discount works

Typically, when a customer holds two or more eligible policies with an insurer, the insurer apply a percentage-based reduction to the premiums. The discount typically applies to the base premium and excludes levies or additional charges. Insurers also usually required policies to meet minimum premium thresholds and specific eligibility criteria, such as ownership structures (e.g., policies held in personal names or trusts).

As examples, Tower Insurance offered a 10% discount for two policies and 20% for three or more policies. Previously, AMI provided ~5% for two policies and 10–13% for three policies.

What’s changing with multi-policy discounts in NZ

The following table summarises when each major insurer has discontinued or plans to discontinue their multi-policy discounts, both for new policies and renewals:

Why are insurers removing multi-policy discounts

Simplification and personalisation

Several insurers have cited simplification and personalisation as the primary reasons for removing multi-policy discounts. AMI and State (brands of IAG) stated that instead of offering discounts, their personalised data means customers are getting a “fair price upfront”. AA Insurance told Consumer NZ the changes were about “simplifying” policy options.

Challenges with apply multi-policy discounts

In recent times, there have been court actions against insurers for failing to properly apply discounts may also be influencing these decisions. For example, in October 2024, AA Insurance was ordered to pay a penalty of over $6.2 million for failing to apply multi-policy and membership discounts, as well as no-claims bonuses. The court found that AA Insurance misled customers about its multi-policy discount in marketing material between 2015 and 2020. The Financial Markets Authority also filed proceedings against Tower Insurance in March 2024 for failing to apply multi-policy discounts totaling $9.5 million. 

What does this mean for consumers

If you have multiple policies with one of the insurers in the table above, you will lose your multi-policy discount either immediately (for new policies) or upon your next renewal (for existing policies). This is a good incentive to now shop around and find out if you’re paying more than you have to for your policies. Pricing across insurers changes from time to time so you may be pleasantly surprised to find that you can save more now without mutli-policy discount with a different insurer. 

Does multi-policy discount save you money

In our earlier research, we found that NZ consumers were better off when they shopped and had policies across different insurers instead of having it all with the same insurer. This allowed the consumer to pick the sharpest priced policy and also the one with the policy benefits that worked the best for them. Looking only at the premiums, this worked out to be cheaper compared to bundling and having it all with one insurer. It was however a limited study of the market and therefore it is best to shop and compare for your own situation to see if it was the case for you.

How to save money on insurance without multi-policy discounts 

There are a number of other ways to save money on insurance in the absence of multi-policy discounts.

Here are the three ways:

1. Shop & compare your insurance – find out if you are paying the good ol’ loyalty tax. There are a number of insurance companies and their pricing and policy benefits can be very different. Quashed.co.nz can help you to compare prices and policy benefits in just a couple of minutes. 

2. Check your Sum Insured – are you over-insuring your car, house or contents? It’s a good time to take stock. Trade Me would be a good place to check how much it would cost to replace your car. Cordell’s online calculator will help you work out how much it would likely cost to rebuild your property. Quashed.co.nz has a simple Contents calculator built into their Contents insurance comparison tool.

3. Pick a higher excess – if you’re defaulting to $250 on your contents policy, $500 on your car policy and $1,000 on your house insurance policy, it may be time to reconsider if you can afford taking a higher excess (more risk yourself). This could save you between 5% and 15%. Quashed.co.nz allows you to easily pick an excess and compare how the premium changes across different providers.

The widespread removal of multi-policy discounts represents a significant shift in New Zealand’s insurance market. While insurers cite simplification and personalisation as the reasons for these changes, technical challenges and recent court actions likely played a role in these decisions as well. For consumers, these changes mean it’s increasingly important to compare options when insurance policies come up for renewal to ensure that you can maximise your insurance savings. 

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Further reading

Here are some great reads we've selected for you:

• How to Save Money on Insurance: Clever ways to cut your insurance costs

• Insurance Mistakes to Avoid: Costly blunders that could drain your wallet with insurance

• Comparing Insurance Costs for Cars: Insurance cost differences across the most popular vehicles in NZ

• Compare House Insurance Quotes: Smart ways to evaluate house insurance cover

• Key considerations with Contents Insurance: Snagging affordable cover without cutting corners

• Average Insurance Costs in NZ: A deep dive into what Kiwis really pay for car, house and contents insurance

• Home Insurance Guide: A must-read for protecting your biggest asset

• Complete Contents Insurance Guide: Everything to know about contents insurance —minus the jargon

Insurance Multi-Policy Discount FAQs

What is a multi-policy discount?

A multi-policy discount is a reduction in insurance premiums offered to customers who hold multiple policies (e.g., home, contents, car) with the same insurer. Discounts typically ranged from 5% to 20%, depending on the number of policies bundled.

Which NZ insurers are removing multi-policy discounts?

Major insurers phasing out multi-policy discounts include AA Insurance, AMI, AMP, ANZ, and State.

When will multi-policy discount end?

The end date varies by insurer: For new policies: Between March 2024 and January 2025, depending on the insurer. For renewals: Generally at the next renewal after the new policy cut-off date, with specific dates varying.

Refer to table above for specific insurers. Information taken from the insurers' website at the time of this writing. We encourage you to check with your insurer if you have questions or are unsure.

Why are insurers removing these discounts?

Reasons include:

• Simplification of policy options

• Move towards personalised pricing models

• Potential technical challenges in implementing discount structures

• Recent court actions against insurers for failing to properly apply discounts