AA Content Insurance "Old to New" Replacement

Superpower21 on 16/11/2025 - 21:57

Hi all,
My dad dropped his iPhone X (I know, it’s pretty old now). The screen didn’t crack, but the display has bright vertical lines all over the screen and it's very hard to see properly now.

He has AA contents insurance and made a claim. AA offered to replace it with an iPhone 14 from JB Hi-Fi, valued at $1,127 (insurance price) He originally bought the phone brand new from duty-free in 2018 for $1,875. However, he also has to pay a $750 excess for the claim.

To me, this doesn’t seem quite right, but here’s AA’s response to his inquiry about the price difference:

"We understand what you are saying however the damaged phone was released in 2017. As newer models are released each year older models decrease in value and eventually become obsolete. You would not pay what you paid originally if you were able to buy this device in todays market.

We will choose how we settle your claim, here is a link to your policy document for reference – https://www.aainsurance.co.nz/manage-policy/policy-documents…

Firstly, we look to repair. Your device is uneconomical to repair.

Secondly, we look to replace like for like if available via our suppliers or provide a cash settlement of the exact replacement value if available elsewhere within New Zealand. Your device cannot be replaced like for like and is no longer sold in retail stores within New Zealand.

Thirdly, we look to replace with the nearest equivalent if possible. The iPhone 14 256GB @ $1,127.00 via JB Hi-Fi (Insurance price) has been deemed the nearest equivalent."

Is this truly the best outcome he can expect? I am trying to negotiate with AA on his behalf, but I feel their old-for-new replacement policy is somewhat misleading. Should he accept their offer and then switch to a different insurance company afterwards? Also, could you please recommend some reliable contents insurance companies?

Thanks

General Discussion

Comments

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  • jjjj on 16/11/2025 - 22:39
    +8

    Yup, welcome to insurance, where they get your yearly premiums, put everything in policy wording that nobody reads, and then at claim time, people are in for a shock.

    All the contents policies are the same. If you were looking for a "set price" replacement, your premiums would be significantly higher as well.

    In this case, I think AA are being quite reasonable - they are saying that they will give you a new device that's equal to your old one, which is true, the iPhone 14 is similar in spec, just not in price. The $750 excess isn't their problem, its something you can decide on when taking out the policy and doesn't factor into the claims process.

    • Superpower21 on 17/11/2025 - 19:44

      Thanks. This is the first time ever he made a claim, so I just want to make sure everything is reasonable.

  • Gwigglesnz on 17/11/2025 - 06:24
    +7

    Nothing unreasonable about this unfortunately, it's how insurance works. They replace based on the current day value and as they say the model of phone is approaching 10 years old. If anything, I think they're being generous.

    There is a $750 excess as this was the option selected when the policy was taken out, which at the time seemed the most appealing option as it would have resulted in lower premiums for your Dad.

    What outcome were you hoping for?

    • Superpower21 on 17/11/2025 - 19:46
      +1

      Thank you. I wasn't sure if this is the standard content insurance terms and just want to make sure he is not being ripped off.

  • Alan6984 on 17/11/2025 - 07:56
    +6

    I agree with the others - this seems like an entirely reasonable, even very favourable, outcome for your father.

  • amcheapdude on 17/11/2025 - 10:47
    +4

    maybe you are just very young and its your first time with insurance so to explain a bit beyond what others have said here:

    • when you sign up for contents insurance, you get to select your excess for claims. if you choose a lower excess, usually your yearly premiums will be higher. the word 'premium' means how much you pay the company yearly for insurance, and the word 'excess' means how much you pay for each and every claim you make.

    • many people will select something like a 1-2k excess for house insurance since you don't claim on that a lot, and then $200-$500 for contents insurance.

    • your father had selected an excess of $750 at the time, which means every claim regardless of value of the product, unless there is any exception then he has to pay this much excess. in return, he gets a slightly lower premium to pay

    • the insurance company are saying that the closest purchasable replacement for the iphone x today is the iphone 14 which is quite fair. you can get refurb iphone x on trademe for about $300 but absolutely not worth it and insurance do not have such relationships through their supply network. $750 for a new iphone 14 256gb is not bad, it would have been better if he elected for lower excess plan but the math might not work out on that over the years with the difference in premium.

    • from here, your dad can 'trade up' when in the store as well, eg. if he wants iphone 16 or 17, he can, but he has to pay the difference in store.

    not sure on the intricacies of your policy, but the other aspect to double check is if he had anything of a no claims bonus and if that is affected after this relatively minor claim. one might opt to just get a used or refurb iphone 14/15 at $800ish and save on the potential cost impact of paying higher premiums. worth doing the maths.. but also get some quotes to have a lower contents excess, sometimes the premium difference isn't that much and you get insurance that you can viably use more often (to a point)

    • Superpower21 on 17/11/2025 - 19:49

      Thank you for explaining this in details. I will keep this trade up option in mind.

  • kyogui on 17/11/2025 - 12:18
    +2

    It's reasonable in my opinion. As long as the replacement phone has the same storage space. The iphone x has no real value at the moment and the iphone 14 is a much better replacement and it has a brand new battery. If you want to have policies that replace at purchase price you need to have the items separately listed and approved by the insurance provider and you will also pay for a higher premium. One thing to think about is to lower the excess in the future sometimes you will only pay a little bit more for $500 excess instead of $750.

    But it won't hurt to go back and ask nicely if they can replace with the latest iphone 17 instead since when your father bought the X it was the flagship at the time.

    • Superpower21 on 17/11/2025 - 19:51
      +2

      Yes definitely need to rethink about the excess. The premium has gone up so much in the recent years, sometimes it's better to go for higher excess than not being insured at all 😔

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