logo
Receive the latest mybusiness news
SUBSCRIBE TO OUR NEWSLETTER
Copyright © 2020 MOMENTUMMEDIA

Allianz, Suncorp forced to refund a combined $62 million

Adam Zuchetti
Adam Zuchetti
17 January 2018 1 minute readShare
Australian dollar, magnifying glass

More than 100,000 Australians who purchased a new car between 2009 and 2017 are set to share in refunds of mis-sold insurance worth more than $62 million.

ASIC revealed that both Allianz and Suncorp had sold insurance to car buyers that was of little to no value to them, following similar findings against QBE Insurance in mid-2017.

Allianz will refund a whopping $45.6 million to around 68,000 customers who purchased various add-on insurance premiums through car dealerships nationally between 1 December 2010 and 30 November 2017.

The affected Allianz products are:

Advertisement
Advertisement
  • Loan Protection Insurance (LPI), designed to cover some loan repayments should the customer die or suffer serious illness or incapacity.
  • Motor Equity Insurance (MEI), which covers the gap between the outstanding balance on the car loan and the insured value if the car is written off.
  • Tyre and Rim Insurance (TRI) that covers the cost of wheel damage resulting from a blowout.
  • Warranty Insurance to cover certain repairs once a manufacturer’s warranty expires.

ASIC expressed a variety of concerns about these policies, including that rebates were not made if the car loan was paid off early, that the size of the deposit on the vehicle was not taken into consideration and that customers would be ineligible to lodge a claim under the policy conditions.

Partial refunds will be offered to customers who were over-insured or paid off the loan early, while full refunds will be paid where the policies offer customers little or no value.

 

Meanwhile Suncorp is set to reimburse 41,428 customers a total of $17.2 million for similar Guaranteed Asset Protection (GAP) insurance policies sold by its subsidiary MTA Insurance between 2009 and 2017.

It is unclear how many of the affected customers from either insurer are SMEs compared with private individuals.

“The refunds offered by Allianz [and Suncorp], together with those from other insurers, make up one of the largest compensation programs achieved by ASIC, with over $120 million in refunds to consumers as a result of ASIC shining a spotlight on these poor consumer outcomes,” said acting ASIC chair Peter Kell.

“Our message to insurers is simple: the needs of your customers must come first in the design, price and sale of your products.”

SPONSORED CONTENT

 

Allianz, Suncorp forced to refund a combined $62 million
mybusiness logo
Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

Leave a Comment

Latest poll

How satisfied are you with the SME measures in the federal budget?