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Too many Australians are being sold junk insurance and rubbish warranties.

DemandARefund helps you complain, demand your money back, and tell insurers and warranty companies to stop selling ‘add ons’ you don’t need.

What is an 'add-on' insurance or warranty?

We mean an insurance or warranty that you didn’t originally mean to buy—it’s added on at the checkout when you go to buy a car, a car loan, credit card or personal loan.

It usually works like this:

 

carcreditloan

You approach a business, looking to get a loan, a credit card or buy a car.

salesloan

You speak with a salesperson and choose what you want to buy.

buy this

Usually when the salesperson is preparing the paperwork, they suggest you also buy insurance or a warranty along with the loan or the car you’re already buying. The insurance or warranty is the ‘add-on’.

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The salesperson usually gets paid extra for each ‘add-on’ product they sell (a commission). These commissions can be a lot of money. We have seen commissions of up to 70 or 80 per cent of the insurance or warranty.

commission

If you applied for finance (like a car loan, personal loan or credit card) the ‘add-on’ insurance or warranty gets added to that loan, so you pay extra interest as well.

What's the problem?

These insurance policies and warranties are usually very low value. We’ve seen cases where people are tricked into buying ‘add on’ insurance and warranties that are virtually useless to them. Some customers buy the ‘add-on’ because they were told they have to buy it to get the loan. We’ve also seen cases where people don’t even realise they’re buying it!

The ‘add on’ sales process creates bad practices. The high commissions encourage salespeople to use dishonest tactics to make a quick buck. It’s designed to make you buy on impulse and is proven to lead to you into buying products that are over-priced, that you don’t really understand, or that you don’t even know you’ve bought.

For more detail on the problem, look at our two reports on add-on products

The Australian Securities and Investments Commission (ASIC) has also been vocal about the problem of ‘add on’ insurance.  Read ASIC’s reports here:

What are we trying to do?

Australians are unfairly losing their hard earned money through these ‘add on’ products. We want insurers and warranty companies to stop selling this way. We want them to stop selling junk.

Have a credit card?

If you have a credit card, you might also be paying premiums for insurance. This would usually be Consumer Credit Insurance, sometimes called other names such as ‘Credit Card Insurance’ or ‘Credit Card Payment Protection’. You might not even remember agreeing to the insurance!

The premiums can add $1,000s to your credit card balance and you might also be paying interest on them. These insurance policies can be low value and might not be suitable for your needs. Read more about Consumer Credit Insurance here.  You can also read about how add-on insurance works here.

You might be entitled to a refund for these premiums, for example if the bank has sold it to you without your knowledge, or the insurance is not the right product for you.

Are you paying back a personal loan?

If you’ve taken out a personal loan, you might also be paying for add-on insurance. This would normally be Consumer Credit Insurance, sometimes called other names such as If you have a credit card, you might also be paying premiums for insurance. This would usually be Consumer Credit Insurance, sometimes called other names such as ‘Loan Protection Insurance’. You might not even remember agreeing to the insurance!

The premiums can add $1,000s to your loan and you might also be paying interest on them. These insurance policies can be low value and might not be suitable for your needs. Read more about Consumer Credit Insurance here.  You can also read about how add-on insurance works here.

You might be entitled to a refund for these premiums, for example if the bank has sold it to you without your knowledge, or the insurance is not the right product for you.

Have a mortgage?

If you have a mortgage, you might also be paying for add-on insurance. This would normally be Consumer Credit Insurance, sometimes called other names such as ‘Mortgage Protection Insurance’. You might not even remember agreeing to the insurance!

The premiums can add $1,000s to your loan and you might also be paying interest on them. These insurance policies can be low value and might not be suitable for your needs. Read more about Consumer Credit Insurance here.  You can also read about how add-on insurance works here.

You might be entitled to a refund for these premiums, for example if the bank has sold it to you without your knowledge, or the insurance is not the right product for you.

Have you bought a car recently?

If you’ve bought a car, you might also have been sold a number of add-on products including an Extended Warranty, Consumer Credit Insurance and Gap Insurance.

You can also read about how add-on insurance works here.

An extended warranty can cost $1,000s, and if it’s added to a car loan, you might be paying interest on it too. These products can be very low value. Don’t forget that you might already have rights under the Australian Consumer Law if something goes wrong with your car! These exist even if you don’t buy a warranty. Read more about extended warranties here.

Consumer Credit Insurance is sometimes called other names such as Loan Protection Insurance. If you have a credit card, you might also be paying premiums for insurance. This would usually be Consumer Credit Insurance, sometimes called other names such as ‘Mortgage Protection Insurance’. You might not even remember agreeing to the insurance!

The premiums can add $1,000s to your loan and you might also be paying interest on them. These insurance policies can be low value and might not be suitable for your needs. Read more about Consumer Credit Insurance here.

You might also have bought Gap Insurance. This can add $100s to your loan and might not be suitable to you. These policies can be very low value. Read more about Gap Insurance here

 

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