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6 Tips for Getting Your Junk Insurance Refund

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During the past four years, Australia has been battling a huge scandal that involves big banks and insurance companies that have sold millions of policies for “junk insurance” on credit cards and loans. These companies sold 5.6 million policies, which means 1 per every 4 Australian adults, and in most cases, the buyers didn’t even know what they were paying for.

Luckily, in 2018, the Baking Royal Commission exposed this fraud, causing a huge scandal that brought forth the need of these banks and insurers to refund billions of dollars in fees which include “junk insurance” premiums. If you took out a credit card loan or financed your car, you might also be the victim of this fraud. To learn about it more and see whether you’re eligible for refunds, take a look at the text below.

Get informed

You might be confused by the term junk insurance, so what is it? Junk insurance is an add-on insurance form that comes with loans and credit cards. These products are usually sold without explicit and informed consent, so they are named after unwanted “junk” mail. They usually don’t have any value as well. In most cases, they cover items that are non-essential and even represent duplicate insurance (insurance for something that’s already insured).

Some examples of junk insurance include Guaranteed Asset Protections, Consumer Credit Insurance, Extended Warranty, Mechanical Breakdown Insurance, Scratch and Dent Insurance, etc.

Study the Swann Insurance scandal

Swann Insurance was a company owned by IAG, one of the country’s biggest insurance companies. Between 2008 and 2018, they sold over 800,000 policies, earning more than $1 billion in premiums and paying about 10% of that in claims.

The Royal Commission established that Swann unfairly designed and sold junk insurance. The company accepted the blame almost in full, stating that it failed to meet community standards. Swann doesn’t sell junk insurance anymore after being charged to pay 434,000 customers $160 million in compensation.

Find a good claim management service company

If you had a similar bad experience, make sure to contact the appropriate companies and ask questions like “can I get my junk insurance refund” and see what professionals have to say. Choose the right company, and they will check whether you’re eligible. This process can be stressful, but your junk refund company has plenty of experience with these cases, so you don’t have to deal with any complicated terms or meet any intimidating people. Your chosen company will manage the process, update you regularly and set you up with a great refund if you’re eligible.

Check your car insurance

Another scandal broke out when the ASIC looked into Australia’s car yards. What they found was information about car dealers getting paid almost 80% of the customer’s first-year premiums as a commission for basically forcing people to sign junk insurance. Commissions to dealers were four times higher than claims to customers. The worst offenders here were GAP Insurance and Loan Termination Insurance.

See if you’re eligible for a refund

There are agencies that help Australians get their refunds by looking into your policies and checking whether you paid for something unwanted with these providers: AVEA Insurance (now Eric Insurance), Allianz Insurance, Aioi Nissay Dowa Insurance Company Australia, LFI, MTA Insurance, National Warranty Company, NM Insurance, Sovereign Insurance, Swann Insurance and QBE Insurance. To know if you might be a victim, check the list of insurance companies identified by ASIC and the Royal Commission.

Don’t run away from a fight

The process of getting your refund might seem hard for people without experience, but it’s actually simple if you find the right company to work with you. Firstly, you need to check your loan or credit card documents for charges like CSI, GAP, Extended Warranty, MBI, Mortgage Protection, Loan Protection and similar. Your chosen company that represents you can request these documents if you don’t have them anymore.

Next, they send information requests to your banks to check for charges for junk insurance. If you have been charged in the past 8 years, you will get a specialist who will handle your case. The right company only charges you for their time if you have insurance, so don’t be scared to contact professionals. Your claim management service company will submit a claim in your name and manage the process—it usually takes about 12 weeks for you to get your money. As the case progresses, you can request regular updates to stay in the loop.

If you notice you’ve been tricked into buying something you don’t want, it’s not the end of the world. Now that the government knows what’s happening, you can get your money back and sleep soundly.

Derek Lotts is a Sydney based writer and researcher, a regular contributor at Smooth Decorator blog. He writes about décor, gardening, recycling, ecology and business. He thinks all of these topics fall under the self-improvement category. He believes in the power of sharing ideas and communicating via the internet to achieve betterment.

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