IAG discovered an error in August 2011 while assessing Canterbury earthquake claims and advised the Commission in October 2011. The problem affects some house and contents insurance policies offered by NZI, Lantern, ASB, BNZ and Co-operative Bank. IAG miscalculated the sum insured in 643 previously paid out total loss insurance claims. The same error will also affect the renewal of 150,755 current policies. As part of the settlement, IAG estimates that it will make payments of up to $3.48 million to affected customers who have previously been paid out on total loss insurance claims, and those with total loss claims, to reflect what they should have received, or are due to receive. IAG will also offer the more than 150,755 current policyholders the option of either accepting an increased sum insured amount and therefore a higher insurance premium or agreeing a different value.
