Car Dealer Add-On Insurance class actions

We are investigating potential class actions against insurance companies on behalf of customers who paid for “add-on” insurance products when purchasing a motor vehicle that was financed through a car dealer. These products are also sometimes referred to as “junk insurance”.

We understand that when selling a car with finance, many car dealers also sold unsuspecting consumers one or more add-on insurance products. Many of these products were expensive and offered no value. We think that if the dealers had given their customers important information about the add-on insurance, the customer would have refused to buy them. The car dealers are the representatives of the insurance companies for the add-on insurance products and therefore the insurance companies are responsible for their actions.

We are investigating the sale of the following add-on insurance products:

  • consumer credit insurance” (sometimes called “CCI” or “loan protection insurance”);
  • shortfall insurance” (sometimes called “GAP insurance”, “guaranteed asset protection insurance”, “motor equity insurance”, or “value protect insurance”);
  • loan termination insurance”;
  • “tyre and rim insurance”; and
  • mechanical insurance” (sometimes called “warranty insurance” or “extended warranty insurance”).

The more common types of motor vehicle insurance such as comprehensive, third party property, or compulsory third-party insurance are not add-on insurance products and are not part of this investigation.

You are eligible to register your interest in the Car Dealer Add-On Insurance class actions if:

  • you purchased a motor vehicle from a car dealer;
  • the vehicle was financed by a loan organised by the car dealer; and
  • you paid for any of the above listed add-on insurance products organised by the car dealer.

It doesn’t cost you anything to register your interest in the potential class actions.

We are investigating the potential class actions against insurers (other than Swann Insurance) and we will provide you with updated information as the investigation progresses.

A class action against Swann Insurance has recently settled, subject to Court approval. If you have an add-on insurance product issued by Swann please do not register. Instead you should contact Johnson Winter & Slattery, the law firm who conducted that class action.

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Am I eligible to register the Car Dealer Add-on Insurance class action?

You are eligible to register your interest in our investigation of the Car Dealer Add-On Insurance class actions if:

  • you purchased a motor vehicle from a car dealer;
  • the vehicle was financed by a loan organised by the car dealer; and
  • you paid for any of the following add-on insurance products organised by the car dealer:
    • consumer credit insurance” (sometimes called “CCI” or “loan protection insurance”);
    • shortfall insurance” (sometimes called “GAP insurance”, “guaranteed asset protection insurance”, “motor equity insurance”, or “value protect insurance”);
    • loan termination insurance”;
    • tyre and rim insurance”; or
    • mechanical insurance” (sometimes called “warranty insurance” or “extended warranty insurance”).

It can sometimes be difficult to tell whether you paid for add-on insurance products. You may need to check your documents from the purchase or financing of your motor vehicle to see if you paid for any of these products.

Do not register if you purchased add-on insurance products issued by Swann. Please contact Johnson Winter & Slattery if you wish to enquire about the Swann Proceeding and settlement.  

About the Car Dealer Add-On Insurance class actions

The products we are investigating are general insurance policies that are added on to the sale of a motor vehicle. They are often paid for by the loan that is taken out to purchase the motor vehicle.

The common types of add-on insurance sold through car dealers are:

  • consumer credit insurance” (sometimes called “CCI” or “loan protection insurance”). This insurers a borrower’s capacity to make repayments under a car loan, including insurance against sickness, injury, disability, death or unemployment;
  • “shortfall insurance” (sometimes called “GAP insurance”, “guaranteed asset protection insurance”, “motor equity insurance”, or “value protect insurance”). This covers the difference between what a consumer owes on their car loan and any amount they may receive under their comprehensive insurance policy, if the car is a total loss;
  • “loan termination insurance”. This covers the difference between what a consumer owes on their car loan and the market value of the car if they return it because they cannot make repayments due to illness or injury;
  • “tyre and rim insurance”. This covers the cost of repairing or replacing damaged tyres and rims from blowouts, punctures or other road damage;
  • mechanical insurance” (sometimes called “warranty insurance” or “extended warranty insurance”). This covers the cost of repairing or replacing parts of the car due to mechanical failure after the manufacturer’s or dealer’s warranty has expired.

The Australian Securities and Investments Commission (ASIC) has undertaken extensive reviews into this industry. Its review suggested that add-on insurance sold through car dealers represents poor value for consumers. 

Want to find out more?

Please see below some frequently asked questions about the investigation.

If you would like further information regarding the potential class actions, please contact us at addonclassaction@mauriceblackburn.com.au or on 1800 497 191.

Please bear in mind that our phone lines and inbox may be quite busy with queries during this period. We will endeavour to respond to your calls and emails as soon as we can and thank you for your patience and understanding.

Frequently Asked Questions

Where seven or more people have claims that arise out of similar circumstances, a class action can be brought by one claimant on their own behalf and as a representative of others.

The class action process saves time and expense by avoiding the need for the courts to determine common issues of fact or law more than once. Class actions are efficient, enabling disputes and claims involving large numbers of people to be resolved via a single case.

Registering your interest will not expose you to any out of pocket costs. All costs in the investigation and any eventual Court proceeding/s will be borne by Maurice Blackburn unless and until there is a successful outcome.

In the event of Court proceedings and there is a successful outcome, any costs payable by Maurice Blackburn will be deducted from, and will not exceed, any compensation that you are entitled to receive. All such costs are required to be considered and approved by the Court.

Nothing.

In the event of Court proceedings and as a member of the class (and not the Representative, in whose name the case has been brought), an adverse costs order may not be made directly against you in respect of the determination of the common issues in the class action. Unless and until there is a successful outcome, all costs will be borne by Maurice Blackburn.

Registering on this website means that you are interested in our investigation of the potential class actions. We may contact you to ask you for further information about any add-on insurance products that you may have paid for, if you say that you are happy for us to do this when you register.

Registering your details does not mean that you will be entitled to compensation.

Registering is not required.

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