In November 2020, national law firm Maurice Blackburn launched a class action against Allianz Insurance on behalf of consumers who were sold worthless add on insurances.
The class action alleges motorists were upsold junk insurances, alleging Allianz trained car dealerships to promote and sell add-on insurances to help boost their profits.
Some insurances sold to motorists include:
Many of these insurances outline policy terms that have exclusions or exemptions that would limit motorist’s ability to claim on the policies they were sold. For example, consumers who were self-employed, unemployed, casual employees and those over the age of 64 would be ineligible to claim on their Allianz Loan Protection policies.
The class action alleges Allianz had engaged in misleading or deceptive conduct and behaved unconscionably. Maurice Blackburn claims that Allianz should refund all premiums paid with interest by its add-on insurance customers.
In 2018, The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry revealed that Australia’s big four banks had been ripping off customers by selling unnecessary and worthless insurance products attached to loans and credit cards.
Law firms are now investigating potential class actions against insurance companies on behalf of customers who paid for “add-on” insurance products when purchasing a motor vehicle, loan, or credit card.
These products are also referred to as “junk insurance”.
A class action is type of legal proceeding in which a person (the applicant or plaintiff) brings a claim on behalf of a wider group of people against a respondent.
Consumers may be able to receive a better refund by opting out of the class action and using Claimo instead or pursuing the refund themselves through the firms dispute resolution channel.
Based on previous class actions for junk insurance, members received significantly less than they were charged. For example, Swann Insurance recently settled a junk insurance class action for $138 Million, however the total charges were around $1 Billion. Legal fees are being deducted from the settlement amount, which means members may receive one tenth of what they were charged.
By pursuing a refund independently, you can pursue a full refund (plus interest charges) whereas the class action generally agrees on an amount which is divided amongst members.
Class Actions can also take up to three years to settle whereas Claimo generally settles claims within three months.
Australian Class Actions use an opt-out model. This means that all people affected by the event or circumstance become members of the class action whether they intended to or not.
These members are legally bound by the decision of the court or settlement unless they opt-out of the proceedings.
Thousands of members do not receive their opt-notice because they have changed addresses and do not register for compensation in time which means they are unable to get a refund on junk insurance
If you opt out, you will need to complete an opt out form and send it to the Supreme or Federal Court who is dealing with the class action.
If you ‘opt out’ of a class action, you remove yourself from a claim entirely. This means you will not be affected by the outcome of a class action at all and will be able to pursue your own individual claim for the same issues separately if you wish to.
If you wish to opt out of the class action, you can contact the Court citing the proceeding number and request a copy of the opt out form.
DISCLAIMER: This article does not provide legal or financial advice. Any information in this article is designed to provide information to consumers who want to learn more about class actions. All information is general in nature. Claimo is not liable for any loss caused, whether due to negligence or otherwise arising from use of, or reliance on, the information provided directly or indirectly, by use of this service. Consider whether the service is right for you. If you are unsure, seek independent legal advice.