Are you one of 36,000 drivers eligible for a refund from your Car Insurer?
“Upselling” or “suggestive selling” has been around for a long time and happens in all businesses. It might have started with “do you want fries with that”, and now it sneaks in in other ways. 
A recent Choice report found car dealers are pushing options that most of us don’t need. For example rust-proofing. All new cars come with rust-proofing already applied in the factory so unless you live next to a beach, don’t even consider it, according to Choice.
Car salespeople will bamboozle you with terms like Extended Dealer Warranties or Extended Factory Warranties and even paint protection, shouldn’t these things be standard anyway?
Which brings us to QBE.
Earlier this month, QBE Insurance announced it will refund up to $16 million to 35,000 customers who bought add-on insurance through car dealerships.
ASIC found that consumers were sold insurance they didn’t need or policies that had little or no value to them. The unnecessary policies sold included “guaranteed asset protection” and “consumer credit insurance”.
What does that even mean?
Consumer Credit Insurance helps borrowers meet repayments on credit cards, home loans and car loans if they lose their jobs, become ill or die.
Guaranteed asset protection insurance is an insurance coverage offered as a supplement to car insurance policies and is designed to cover the unpaid balance of a car loan in the event of a total loss of the vehicle.
In a statement released recently, QBE says the average refund will be around $400 but could be as high as $3,000 and all refunds will include interest.
So are you entitled to a refund? According to ASIC’s Moneysmart site, you should ask yourself the following:
- You may be entitled to a refund if you bought QBE branded Guaranteed Asset Protection (GAP) or Consumer Credit Insurance (CCI) when you bought a car between 2011 and 2017.
- If you bought a car between these dates, you should check if you bought QBE GAP or CCI insurance.
QBE will be writing to all affected customers from 2 August 2017. If you don't receive a letter and you think you might be eligible for a refund you can contact QBE:
- by phone - 1300 022 509
- by email - addonrefunds@qbe.com
- via their website - qbe.com.au/addoninsurancerefunds
All eligible customers who bought QBE GAP insurance will be refunded at least a year's worth of GAP insurance premiums because the 'new for old' cover included in their comprehensive car insurance from any insurer would have provided similar cover as the GAP insurance for at least the first year.
You may also be eligible for a further refund of your GAP premium if you:
- paid a large deposit for your car (which means you were unlikely to need GAP insurance)
- were sold more GAP cover than you needed
- paid off your loan early.
If you are under 25 and bought the QBE CCI insurance, you will be offered a refund for the cost of the life and trauma element of the insurance. This is because you are unlikely to have dependents who would rely on the insurance to meet loan repayments if you died or could no longer earn an income.
The moral of the story?
Always be aware of what you are covered for when it comes to any type of insurance. Are you 60 years old and still covered by your private health fund for pregnancy? If you’re considering life insurance, do you already have it included as part of your superannuation policy?
Before you sign up for any insurance, make sure you'll benefit from the insurance or don't already have similar cover from somewhere else. Forewarned is forearmed.
FiftyUp Club Pty Ltd ACN 166 905 175 (FiftyUp Club) is a Corporate Authorised Representative (AR Number 465649) of One Big Switch Pty Ltd ACN 150 963 474 (AFSL number 455982). Any advice provided is general adviceonly and does not take into consideration your objectives, financial situation or needs.
