A major development in consumer rights has emerged in Australia. Allianz Insurance has agreed to pay $170 million to settle a class-action lawsuit. This settlement benefits nearly 200,000 Australians who were allegedly misled into purchasing car dealer add-on insurance products between June 1, 2006, and September 27, 2021.
This case, led by legal firms Maurice Blackburn and Johnson Winter Slattery, claims that these insurance products were of little to no value and violated legal standards. Let’s break down what this means for affected consumers.
What Was the Case About?
The lawsuit focused on car dealer add-on insurance products offered by Allianz Insurance. These were optional insurance products sold at car dealerships, including Loan Protection Insurance, Motor Equity Insurance, Extended Motor Warranty, and Tyre and Rim Insurance.
The Australian Securities and Investments Commission (ASIC) had long criticized such practices. In fact, ASIC’s earlier investigation revealed shocking details:
- Between 2013 and 2015, customers paid $1.6 billion in premiums for add-on insurance, but only $144 million was returned in claims.
- Dealerships earned $602 million in commissions—four times the amount paid out to customers.
This sparked widespread criticism, with many alleging that these products were sold using misleading tactics.
Details of the Settlement
The $170 million settlement is one of Australia’s largest consumer class-action payouts. However, Allianz has not admitted any wrongdoing in agreeing to this settlement.
A court hearing is scheduled for March 11, 2025, to approve the settlement officially. If approved, it will bring closure to the affected customers who joined the class action. Maurice Blackburn has already started reaching out to eligible individuals via text messages, emails, and postal notices.
Who Is Eligible for Compensation?
If you’re wondering whether you might qualify for a share of the settlement, here are the key requirements:
- Vehicle Purchase: You must have bought a car from a dealership between June 1, 2006, and September 27, 2021.
- Add-On Insurance: You must have purchased Allianz add-on insurance products during this period, such as Loan Protection Insurance or Motor Equity Insurance.
- Premium Payment: You should have paid a premium for the insurance product, either fully or partially.
Important Note: Only individuals who registered for the class action before the July 15, 2024 deadline are eligible for compensation.
How Will Compensation Be Calculated?
The exact payout for each person hasn’t been finalized. However, registered members will receive a share of the settlement pool. The amount will depend on several factors:
- The total premium paid for the insurance product.
- Whether the individual already received a refund or claim payment from Allianz.
Maurice Blackburn has confirmed that 25% of the settlement will cover legal expenses. Additionally, $5 million will be allocated for reimbursement expenses and the settlement administration process.
A Milestone for Consumer Rights
This settlement is a significant step forward in protecting consumer rights in Australia. For years, the sale of add-on insurance at car dealerships has been criticized for prioritizing commissions over value to customers.
The settlement sends a strong message to corporations about accountability. While it won’t undo the financial burden for many, it offers some relief to those affected.
What’s Next for Affected Consumers?
If you believe you’re eligible for compensation but haven’t received communication from Maurice Blackburn, it’s recommended to contact them directly. Keep an eye out for updates after the court hearing in March 2025.
Additionally, this case highlights the importance of scrutinizing insurance products before making a purchase. Consumers should ask questions and carefully evaluate the value of any add-on services.
This article has been carefully fact-checked by our editorial team to ensure accuracy and eliminate any misleading information. We are committed to maintaining the highest standards of integrity in our content.
Filza specializes in simplifying financial topics for everyday readers. Whether breaking down Canada’s tax guides or U.S. benefits like SNAP and VA Disability, Filza’s relatable writing style ensures readers feel confident and informed. Follow her insights on LinkedIn or reach out via email at shewrites.health@gmail.com.
