Did I pay for Junk Insurance on my Personal Loan?
If you have ever taken out a personal loan, you may have been sold add-on insurance.
Add-on insurance is optional insurance that is added to your loans and credit cards to protect you in the event you lose your job, are injured or in the event of death.
The most common type of add-on insurance is Consumer Credit Insurance (CCI).
In 2018, the Banking Royal Commission found that millions of Australians had been sold add-on insurance or ‘junk insurance’.
The term ‘junk insurance’ was coined by the Banking Royal Commission because these policies often provided little value to the customers they were sold to.
ASIC also investigated the sale of junk insurance and found that many of the big banks, including Westpac, ANZ, Commonwealth and NAB had sold millions of policies to their customers.
In its findings, ASIC found that Westpac sold the insurance without the consent of its customer.
This means that you may have had junk insurance added to your personal loan without even knowing about it!
The Banking Royal Commission found that Commonwealth Bank sold junk insurance to people who would not be eligible to claim. This included students, pensioners, and people without jobs. If you fall into that category, you may be eligible for a refund.
Find out how much you have been charged for FREE, here.
The big four banks are not the only financial institutions that were found to have sold junk insurance to consumers on personal loans, car loans, home loans and credit cards.
Some of the other lenders that may have sold junk insurance include:
Bank of Queensland
Liberty Finance
Suncorp
Macquarie Bank
Credit Union Australia
Citibank
Bankwest
Latitude Finance (formally GE Money)
Bank of Melbourne
Bank SA
Bendigo Bank
Find out how much you have been charged for FREE, here.
How to I know if I have paid junk insurance on my personal loan?
In short, many Australians do not know if they were sold junk insurance. Claimo can investigate your personal loans, car loans, home loans and credit cards to see if you have been charged for junk insurance.
Junk insurance has many names. Some of the most common add-on insurance policies seen on personal loans are:
- Consumer credit insurance (CCI)
- Loan protection insurance (LPI)
- Loan termination insurance
- Redundancy Insurance
- Loan Repayment Protection
Why is add-on insurance junk insurance?
There are many reasons why add-on insurance can be considered junk insurance.
- A high number of add-on insurance claims are denied, and this is the primary reason the insurance has become known as junk insurance.
- ASIC reviews found that on personal loans, claims ratios are extremely low. For example, Suncorp, Band of Queensland, CUA, Bendigo and ANZ each had a claims ratio less than 14 cents for every dollar paid.
- Junk insurance premiums are often extremely high, and the level of cover may be a lot less than the debt owing.
- You may not be able to claim because you are excluded.
If it’s junk, is it still being sold?
Most financial institutions stopped selling junk insurance after the Royal Banking Commission in 2018. However, if your loan is still open, you may still be covered.
Some financial institutions are still selling
Find out if you are being charged, here.
I have junk insurance, am I eligible for a refund?
If you have been sold junk insurance, you may be eligible for a refund. Claimo are experts in add-on insurance and know all the reasons why you should get your money back.
If you’re unsure, Claimo can can find out whether you have been charged. We will contact your financial firms directly. Find out if you are being charged, here.
Once we identify that you have been charged, we will give you a call to establish your claim.
If you still have your loan documentation, you can send this to Claimo to assess.
