The Banking Royal Commission has yet again been in the news and insurance companies have once again been ordered to refund customers who purchased ‘junk’ add-on car cover.
The add-on covers that are being refunded to customers are those that were found to have little to no value. Here is the breakdown of insurance companies and what they owe to customers:
- Allianz is refunding $45.6 million to 68,000 customers.
- IAG subsidiary Swann Insurance is still in the process of refunding $39 million to 67,690 customers.
- Suncorp is refunding $17.2 million to 41,428 customers.
- QBE is refunding $15.9 million to more than 35,000 customers.
- Virginia Surety Company is refunding $330,000 to more than 500 customers.
These issues surround customers purchasing both gap and comprehensive insurance on new cars, when the vehicle already included replacement cover.
Other customers who purchased gap insurance had no finance gap at the point of sale and it was revealed that others purchased a higher level of gap or tyre and rim insurance than was necessary.
The MTA will continue to monitor the effects of the Banking Royal Commission on our industry and Dealers must take care when explaining add-on extras to their customers.
It is positive to see that insurance companies are starting to admit their wrong doing in misleading consumers and we hope that this will also ocur in regards to the collision repair sector.The powers of a Royal Commission cannot be understated and insurance companies will continue to be a focus of discussion moving forward with investigations.