Historic $170 Million Payout from Insurance Giant to Thousands of Australians

A proposal has been made over Allianz Insurance for the sale of car dealer add-on insurance products against them. The amount is pegged at a settlement of about $170 million, which might rank as one of the largest class action settlements in Australian consumer history. Close to 200,000 Australians could be repaid their compensations. Find all you’d like to know regarding the settlement, eligibility, and the process for compensation.

Settlement

The class action lawsuit filed by Maurice Blackburn and Johnson Winter Slattery, which it led as lead law firms, claimed the add-on products of insurance that Allianz sold to buyers between June 1, 2006 and September 27, 2021, added little to no value for these consumers.

Three add-on types of insurance sold by dealerships-LIC, Motor Equity Insurance, extended motor warranty, and Tyre and Rim Insurance-are also found to be sold in a form that infringes Australia’s consumer laws. >

ASIC’S Findings

The Australian Securities and Investments Commission has long sounded warnings over add-on policies. From 2013 to 2015, consumers who purchased vehicles paid an aggregate $1.6 billion in premiums on these products. Only $144 million in successful claims were made from this, that is only a small portion of the aggregate amount. Comparatively, the dealerships gained an aggregate amount of $602 million in commissions on these add-on insurance products. >

Who Is Eligible

You are likely to qualify for a refund if you have one of the following conditions: >

  • Purchased a car from a dealer between June 1, 2006 and September 27, 2021
  • You purchased one or more of the following add-on insurance products from Allianz: Loan Protection Insurance, Motor Equity Insurance, Extended Motor Warranty, or Tyre and Rim Insurance.
  • You paid a premium or incurred liability to pay for the add-on insurance products.

The individual must have registered for the class action before July 15, 2024, at 4 pm. If the individual fails to register before the deadline, he or she will not be eligible unless the court makes an exception.

What’s Next?

The settlement will be subject to court approval. The court has scheduled a hearing for March 11, 2025. If the settlement is approved, registered group members will share in the settlement pool based on the following factors: >

  • How much they paid in premiums for their insurance policy.
  • Whether they have already received refunds or claim payments from Allianz.

Group Members

Maurice Blackburn, one of the law firms representing the case, has been contacting the eligible group members through SMS, emails, and postal notices.

If you are a registered member, you do not have to do anything unless you wish to object to the settlement.

Amount

The exact amount for each individual is still unknown. Registered members will be paid out from the settlement pool, but there will be the following deductions:

  • 25% of the settlement amount for costs of legal services.
  • $5 million for cost of reimbursement for the claimants and administrative expenses.

This amount that you will receive depends on how much you paid in premiums and any refunds or claims that you received before.

Key Takeaways

The settlement is a milestone for Australian consumers who were sold low-value insurance products. Although the actual amount of compensation remains uncertain, eligible Australians will be receiving large payouts depending on their situation.

If you’re eligible and have already registered, stay tuned for updates as the court decision approaches.

FAQs:

Who is eligible for the Allianz settlement?

Those who purchased Allianz add-on insurance between 2006 and 2021.

What types of insurance are included in the settlement?

Loan Protection, Motor Equity, Extended Warranty, and Tyre and Rim Insurance.

When is the settlement approval hearing?

The court hearing is scheduled for March 11, 2025.

How much compensation will I receive?

It depends on premiums paid and prior refunds or claims.

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