12/062
DECISION
Meeting 10 April 2012
Complaint 12/062
Complainant: A. Wheeler
Advertisement: Tower Insurance
Complaint: The voiceover in the television advertisement for Tower Insurance
stated, in part:
“At Tower, we found that many claims for damage to the things you own are
from a single event that requires you to claim from more than one car, house
or contents policy. What’s that mean? Well if a tree falls on your barbie, your
car and your house that’s a single event requiring multiple claims. This can
result in an excess for each and every claim. But at Tower we apply one
excess for multiple claims caused by the same event. Just one excess for
one event.”
The voiceover was accompanied by a man’s hand drawing on a cartoon blackboard
writing down the words spoken in the voiceover.
Complainant, A. Wheeler, said:
The advert states that if a single event causes claims under multiple policies only 1
excess will apply. They imply that other insurance companies will charge multiple
excess fees. I have been with 5 NZ insurances companies and NEVER have I been
charged multiple excess charges when a single event caused claims over more than
one policy. I am not even sure whether it would be legal for an insurance company
to charge multiple excess fees in such a circumstance.
The Chairman ruled that the following provisions were relevant:
Code of Ethics
Basic Principle 4: All advertisements should be prepared with a due sense
of social responsibility to consumers and to society.
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Rule 2: Truthful Presentation - Advertisements should not contain any
statement or visual presentation or create an overall impression which directly
or by implication, omission, ambiguity or exaggerated claim is misleading or
deceptive, is likely to deceive or mislead the consumer, makes false and
misleading representation, abuses the trust of the consumer or exploits
his/her lack of experience or knowledge. (Obvious hyperbole, identifiable as
such, is not considered to be misleading).
The Advertiser, Tower, said:
Thank you for your letter addressed to TOWER’s Group Managing Director …
regarding a complaint about our One Event television commercial. I am responding
on behalf of TOWER.
I note that the complaint specifically refers to the Code of Ethics - Basic Principle 4
and the Code of Ethics - Rule 2, which are identified below.
Basic Principle 4:
All advertisements should be prepared with a due sense of social
responsibility to consumers and to society.
Rule 2:
Truthful Presentation - Advertisements should not contain any statement or
visual presentation or create an overall impression which directly or by
implication, omission, ambiguity or exaggerated claim is misleading or
deceptive, is likely to deceive or mislead the consumer, makes false and
misleading representation, abuses the trust of the consumer or exploits
his/her lack of experience or knowledge. (Obvious hyperbole, identifiable as
such, is not considered to be misleading).
Overall, the purpose of our television commercial was to educate the public on one of
the key features of our products - that being our one event-one excess benefit. The
lead message in the television commercial was borne from TOWER'S own insight
and claims activity. The advertisement was not designed to be a statement about the
insurance market in general or compare other providers.
With regard to the specifics of the complaint, we highlight and address the following
points:
1. The complainant has been with five insurance companies and has never
been charged multiple excesses for claims resulting from one event
We appreciate that A. Wheeler has not had the experience of being charged
multiple excesses when making a claim caused by the same event. Without
details of their policies and their claims it is difficult for us to comment on his
particular situation. It is however possible for an individual in New Zealand to
be charged more than one excess when making a claim across multiple
policies. By way of example, according to their on sale policy documentation,
State, AMI and AA could charge more than one excess as (unlike their house
and contents policies) their motor policies do not state that the one event-one
excess benefit applies.
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2. The complainant is not sure that it would be legal for an insurance
company to charge multiple excesses in such a circumstance
The one event-one excess feature is generally a benefit and not necessarily a
standard feature in all policy documents around New Zealand. An insurance
company would be within their legal rights to charge multiple excesses for
multiple claims (even if caused by the same event) if this benefit was not
included in the relevant policy wording(s). However we note that although
other insurance companies could charge multiple excesses they may elect
not to do so for commercial reasons.
3. The complainant believes that we are implying other insurance
companies will charge multiple excess fees
We made a conscious decision to stay away from comparative advertising.
Even with our competitor research indicating that other insurance companies
would be within their rights to charge multiple excesses (refer to point 1
above), we proactively decided to exclude any competitor comparisons. Our
script states,
"At TOWER, we've found that many claims for damage to the things you
own are from a single event that requires you to claim from more than one
car, house or contents policy. What's that mean? Well, if a tree falls on
your barbie... your car...and your house, that's a single event requiring
multiple claims. This can result in an excess for each and every claim, but
at TOWER we apply ONE excess for multiple claims caused by the same
event. Just one excess for one event, that's it."
As part of TOWER's robust approval and compliance process, the television
commercial was in fact altered during production to ensure we did not use
comparative advertising.
The initial, draft script previously read "Some insurance companies might apply
one excess for every single claim. At TOWER we apply one excess for multiple
claims caused by the same event."
Despite the fact that State, AA and AMI would be within their rights to charge
more than one excess (because of their motor policy wordings), we decided to
remove the comparative statement to ensure we did not breach the ASA
guidelines.
We believe that the end result is an appropriate balance between educating the
public about our product benefit whilst operating within the ASA guidelines.
The statement in the script "Well, if a tree falls on your barbie... your car.. .and
your house, that's a single event requiring multiple claims. This can result in an
excess for each and every claim" refers to what the situation at TOWER could be
if we did not have the one event-one excess benefit.
Even if an unintended interpretation was taken to imply that other insurance
companies could charge multiple excesses, our research shows this to be true.
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In conclusion, we do not believe that we have breached either Basic Principle 4 or
Rule 2, because:
1. We conducted market research which shows that not all insurance companies
offer this benefit (refer to point 1 above).
2. We have a robust internal testing process that our advertisements are put
through where amendments are made to ensure compliance (refer to point 3
above).
3. We do not believe that any aspect of the advertisement is misleading or
deceptive directly or by implication.
Should you require any further information or require clarification on any of the above
points, please do not hesitate to contact me.
The Agency, AIM Proximity, said:
On behalf of my client TOWER Insurance, our response to the correspondence
received by A. Wheeler is as follows:
The complainant believes that the advertisement implies other insurance companies
do charge multiple excesses, where in their experience this has never been the case,
and it is therefore misleading. They also query whether charging multiple excesses is
legal.
The brief from which this advertisement arose was to educate consumers on a key
feature of TOWER's general insurance policies that they may well not be currently
aware of. We were not making a comparison with other insurance companies.
While other insurance companies, at their discretion, may not charge multiple
excesses caused by one event, the motor vehicle policy documents of key
competitors do not specifically mention this, though we acknowledge that their house
and contents policies do. Therefore it is in their legal right to charge multiple
excesses for certain claims. As a comparison, the 'one event, one excess' benefit is
available across car, house and contents policies with TOWER.
We believe that our advertisement complies with the ASA guidelines.
The Media Agency, Spark PHD, said:
Spark PHD is contracted by Tower Ltd to plan and implement paid media for the
purposes of advertising. Given that the complaint in this instance relates to the
statements made in the advertising and does not concern the placement of the ads,
the matter falls outside of our jurisdiction.
Commercial Approvals Bureau (CAB) said on behalf of the media:
We have been asked to respond to this complaint under the Code of Ethics - Basic
Principle 4 - social responsibility and Rule 2-truthfulness.
The complainant queried whether it would actually be legal for an insurance company
to charge multiple excess fees for a single event as they believed had been implied
in this commercial.
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The voiceover clearly states one event can result in excesses for each and every
claim. This is a quite legitimate statement. It is not saying all insurance companies
do charge an excess on each policy should one event occur in which damage results
to items covered under different policies.
There is a growing trend for insurance companies to build separate personal policies
(such as house, home contents, car, boat etc) into the one package. Some
insurance companies in combination covers such as this state in their 'general
conditions' that only the excess on the highest component will apply in the case of a
'one event' claim.
If insurance cover is arranged through a broker, the business is quite often spread
over different insurance companies, and obviously in those instances each claim is
likely to attract an excess.
Insurance companies treat every case on its merits and it is entirely up to them to
decide how they will process any claim.
The commercial does not state that only Tower charges one excess on multiple
claims from a single event and for this reason the complaint should not be upheld.
Deliberation
The Complaints Board carefully read all correspondence in relation to the complaint,
and viewed a copy of the advertisement. It noted that, in the Complainant’s view, the
advertisement was misleading as it implied that Tower applied one excess fee for
multiple claims from a single event while other insurance companies would charge
multiple excess fees.
The Chairman directed the Complaints Board to consider the advertisement with
reference to Basic Principle 4 and Rule 2 of the Code of Ethics. This required the
Complaints Board to consider whether or not the advertisement contained anything
which, either directly or by implication, was likely to deceive or mislead the consumer
and if it had been prepared with a due sense of social responsibility to consumers
and to society.
Turning to the question raised by the Complainant about the illegality of any
insurance company charging multiple excesses from one event, the Advertiser
stated: “The one event-one excess feature is generally a benefit and not
necessarily a standard feature in all policy documents around New Zealand. An
insurance company would be within their legal rights to charge multiple excesses for
multiple claims (even if caused by the same event) if this benefit was not included in
the relevant policy wording(s).”
The Complaints Board turned to the response from the Advertiser and noted where it
stated: “… the purpose of our television commercial was to educate the public on one
of the key features of our products - that being our one event-one excess benefit. …
The advertisement was not designed to be a statement about the insurance market
in general or compare other providers.”
It also noted the response from the CAB where it stated: “The voiceover clearly
states one event can result in excesses for each and every claim. This is a quite
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legitimate statement. It is not saying all insurance companies do charge an excess
on each policy should one event occur in which damage results to items covered
under different policies …Insurance companies treat every case on its merits and it is
entirely up to them to decide how they will process any claim.”
Turning to the advertisement, the Complaints Board agreed that the intent of the
advertisement was to educate the consumer about the new features of Tower’s
insurance policy rather than make a direct comparison with other companies’ excess
policies.
In light of these observations, the Complaints Board found that the advertisement
was not likely to deceive or mislead the consumer and as such, was prepared with
the due sense of responsibility. Therefore, the Complaints Board found that the
advertisement was not in breach of Basic Principle 4 or Rule 2 of the Code of Ethics.
Accordingly, the Complaints Board ruled to not uphold the complaint.
Decision: Complaint Not Upheld