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Allianz hit with 2nd class action over car insurance rip-off
A new class action has been launched against Allianz on behalf of motorists who were sold “valueless”, “add-on” insurance via car dealers.
Tony Zhang
The class action launched by Maurice Blackburn alleges thousands of motorists who arranged finance through car dealerships were upsold several types of worthless Allianz insurance to shamelessly boost profits.
Maurice Blackburn national head of class actions Andrew Watson said the sale of add-on insurance through car dealerships was widespread and had been criticised by the Australian Securities and Investment Commission over many years.
“Many of these insurance products were unduly expensive and offered no value to customers. The exploitation was compounded when these policies were paid for by the same high interest rate loans that the dealers arranged to finance the purchase of cars,” Mr Watson said.
“The car dealers sold these products when they were of no or very little value and not only did they keep quiet about that but they added the junk insurance products to loan contracts often without their customer being aware.
“If customers knew and understood that they were being asked to pay thousands of dollars for these valueless products, they would have rejected the offer without hesitation.”
The class action will allege Allianz engaged in misleading or deceptive conduct and behaved unconscionably. The action claims that Allianz should refund all premiums paid by its add-on insurance customers with interest.
Many of these insurance products were complex financial instruments with policy terms that had numerous exclusions and exceptions which severely limited the protections offered.
For example, the firm had investigated that Allianz’s Loan Protection Insurance excluded consumers who were self-employed, unemployed, casual employees and those over the age of 64.
In other cases, customers were sold CCI add-on insurance for death and disability, despite dealers and Allianz knowing they were employed and therefore likely to have cover for things like accident disability through their superannuation funds.
The class action also alleges Allianz trained car dealers to promote and sell the add-on insurance products and paid them lucrative commissions.
The lead plaintiff is 26-year-old casual employee Jordan Wilkinson, who is one of the many victims allegedly caught out by the so-called “car yard insurance”.
In 2015 he was hoodwinked into purchasing more than $3,000 in unnecessary Allianz insurance products as part of a loan agreement for a $20,000 Ford Falcon XR6.
A similar class action was launched earlier this year by Johnson Winter & Slattery.
At the time Consumer Action Law Centre senior policy officer Cat Newton had previously stated that some motorists are still being stung by dealers with “junk” car insurance policies.
“We continue to hear from people who have been flogged by junk insurance this year, particularly in car yards [so] to prevent ongoing harm, we need ASIC to intervene to stop the sale of junk insurance by car dealers,” Ms Newton said.
