In a major consumer victory, over 200,000 Australians are set to receive compensation after Allianz Insurance agreed to a landmark $170 million settlement. This case, one of the largest consumer class action outcomes in Australia’s history, revolves around allegations of mis-sold add-on insurance policies through car dealerships.
The Legal Battle Against Low-Value Insurance Products
The class action was jointly filed by law firms Maurice Blackburn and Johnson Winter Slattery. It targeted Allianz’s add-on insurance products sold between June 1, 2006, and September 27, 2021. The claimants argued that these policies offered little to no value and were sold inappropriately to consumers.
The Australian Securities and Investments Commission (ASIC) has long criticized such practices. Between 2013 and 2015 alone, Australians paid $1.6 billion in premiums for add-on insurance but received only $144 million in claims. Astonishingly, car dealerships pocketed $602 million in commissions—more than four times the amount customers received in payouts.
Who Is Eligible for Compensation?
The settlement applies to consumers who purchased vehicles during the specified period and were sold add-on insurance products such as:
- Loan Protection Insurance
- Motor Equity Insurance
- Extended Motor Warranty
- Tyre and Rim Insurance
To qualify for compensation, affected individuals must have registered for the class action by July 15, 2024, at 4:00 PM. Unfortunately, those who missed the deadline will not be eligible unless the court grants special permission.
What’s Next for the Settlement?
While Allianz has not admitted liability, the settlement is awaiting court approval. A hearing scheduled for March 11, 2025, will determine whether the settlement proceeds. If approved, the $170 million will be distributed to approximately 200,000 eligible claimants.
How Much Compensation Will You Receive?
The amount each individual receives will depend on the premium paid, any previous refunds, and claims they’ve already made. However, the total settlement fund will be reduced by legal fees (25% of the $170 million), administrative expenses estimated at $5 million, and reimbursements for the plaintiffs who initiated the case.
What Should Affected Consumers Do Now?
Maurice Blackburn, one of the law firms handling the case, has started notifying eligible participants via text messages, emails, and postal mail. At this point, affected individuals do not need to take any further action unless they wish to object to the settlement.
Consumers who believe they were wrongfully sold an Allianz add-on insurance policy should keep an eye out for these notifications. If approved, this settlement will provide much-needed financial relief to many Australians and mark a significant step in addressing unethical sales practices.
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Premlata is a seasoned finance writer with a keen eye for unraveling complex global financial systems. From government benefits to energy rebates and recruitment trends, she empowers readers with actionable insights and clarity. When she’s not crafting impactful articles, you can find her sharing her expertise on LinkedIn or connecting via email at [email protected].