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Vero stops offering excess-free windscreen replacement cover in bid to counter soaring motor claims costs

Vero stops offering excess-free windscreen replacement cover in bid to counter soaring motor claims costs

New Zealand’s second largest general insurer, Vero, is no longer offering its comprehensive car insurance customers excess-free windscreen and window glass replacement.

Under Vero’s new comprehensive car insurance policies released this month, it will only waive a customer’s excess if the damage to their windscreen or widow glass can be repaired.

Previously, it would’ve waived this excess, regardless of whether the glass needed to be repaired or replaced.

The change affects ‘Vero’ branded policies, as well as ANZ, AMP Everyday Online and Warehouse Money compressive car insurance policies that Vero underwrites. Vero is owned by Suncorp. 

A Vero spokesperson says: “Because only approximately 7% of our customers claim for windscreen repair or replacement every year we believe these changes will only affect a small number of customers, and will assist us to keep premiums more affordable for the majority of our customers.”

The way Vero previously dealt with windscreen damage was attractive compared to its competitors.

Policies underwritten by IAG and Tower generally only offer excess-free windscreen/glass cover as an optional benefit that policyholders can receive if they pay a higher premium.

Youi doesn’t offer a windscreen/glass excess waiver at all.

An industry-wide issue

The Vero spokesperson explains why the insurer has made the change: “Following a review of our motor insurance book, Vero has identified that the frequency of vehicle glass claims we receive has risen sharply over the past few years.

“The rising number of claims, as well as rapid increases in vehicle technology, have contributed to a rise in claims costs for vehicle glass that we believe is not sustainable…

“The challenges for vehicle insurance appear to be industry wide.” 

Industry figures collected by the Insurance Council of New Zealand show that the amount insurers have paid for private and commercial motor claims as a proportion of premiums has spiked in recent years, with the loss ratio for motor insurance rising from 65% in 2013, to 70% in 2015, and 77% in 2017.

So for every dollar insurers received in premiums in 2017, they paid 77 cents in claims. Put in context, the loss ratio was only 60% for domestic buildings.

Nonetheless, policyholders have been paying for these increased costs.

According to a relatively unscientific experiment conducted by, comprehensive car insurance premiums rose by 20% from January 2016 to January 2018.

The Vero spokesperson says the insurer is also looking for ways of being more efficient.

“For example, we have recently opened our third S.M.A.R.T Repair shop in East Tamaki, which uses advanced technology to dramatically reduce turnaround times for small and medium collision damage, providing an exceptional customer experience and freeing up panel beating resource for larger repairs.”

NZbrokers CEO Jo Mason believes other insurers are likely to follow Vero’s lead in making policy changes, so suggests people check their policies when they come up for renewal.

Here is a copy of Vero's new comprehensive car insurance policy, and here's a copy of its old one. 

For more on car insurance, see this comparison published in January. As per the above, note the changes to Vero's policy wordings.

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Typical NZ drivers The home of tailgaters

True, but this seldom results in a cracked windscreen. Mine was cracked by a stone thrown up by a truck travelling about 30m ahead of me. I only have 3rd party insurance. I went to a car parts shop and bought a windscreen repair kit. With a suction device to squirt the resin in properly. It worked a treat.
By the way I think everyone should be forced to only have 3rd party insurance, that way they would drive more carefully knowing that any damage they cause to their car will come out of their own pocket. Or maybe 3rd party fire and theft.

For me it's always been a stone flicked up by a vehicle travelling in the opposite direction. I blame out shitty third-world road construction.

Yes that’s it. Bad enough on the open or rural roads but the poor maintenance of inner city streets is appalling. Maybe if the councils were liable they might do something, but fat chance.

That horrible inland Marlborough road got me two stone chips from trucks throwing up a hail of stones.

Agreed. have had three windscreens shatter while driving in my time. only one was fro a vehicle I was following, and I was outside the minimum safe distance, and it was a big stone from between a truck's double rear tyres. the other two were from vehicles going the other way, and just out side road works. On two of the occasions i saw the rocks coming but did not have time or space to avoid them.

I suggest the insurance companies need to talk to the road maintenance firms to identify better ways to fix road surfaces without leaving all the stones behind. But this issue is bigger than this as the huge trucks we have wreck our roads and we all pay the price!

I look forward to their prices coming down then......yeah right

Yep, they say that there are not many so it won't affect many. But then they go on to say that the numbers are rising! Huh? So its going to affect more and more as more cars have these autonomous features fitted.

Well it seems as though Vero by removing a benefit that can presumably be easily be costed, especially as they know how many policies are subject to windscreen claims, ("approximately 7%") and with an analysis of a sample can probably have an approximate dollar figure put on it, have forgotten how to price for risk? I suppose if excesses are only $500 it is not a big issue for customers however as customers mostly don't cause windscreen claims you'd think they ought to have been given the option of wearing the excess or paying a little bit more premium not to have it. Next they might say they won't replace a bumper; only pay for those that can be straightened.