ASIC has announced that AAI Limited (trading as AAMI) has paid $43,200 in penalties for misleading advertising after ASIC found it had made false or misleading statements on its website and in radio advertisements for home insurance.
AAMI’s promotion of its Home Building Insurance ‘Complete Replacement Cover’ stated that AAMI would repair or rebuild the insured house, no matter the cost to AAMI.
ASIC was concerned that the statements gave the impression that AAMI would itself always take the necessary steps to repair or rebuild a home when a claim was made.
But the statements 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.
AAMI amended its advertising after ASIC raised its concerns.