When buying a new or used car, you’re offered different types of add-on insurance. A car is a significant investment, so naturally, you want to do everything you can to protect it.
However, you’re likely to have to negotiate with salespeople who might overload you with information and choices. As a consequence, you could end up with junk car insurance that was entirely unnecessary.
The good news is that if you’ve bought a car in the past eleven years, you might be eligible for a refund. Here’s everything you need to know about it.
Have You Purchased These Add-On Insurance Policies?
The Australian Securities and Investments Commission (ASIC) has been urging everyone who has bought a car to go over their purchase contract and look for red flags in the past decade. There are several types of junk insurance policies to watch out for specifically.
Guaranteed Asset Protection (GAP) Insurance
This type of add-on is also called Motor Equity Insurance (MEI) or shortfall insurance. When you write off your car, the lender receives a gap between the amount you owe and what you get from the car insurance.
Unfortunately, your car’s value decreases over time and the longer you keep GAP, the less likely it is you’ll see any payout.
Loan Termination Insurance
Loan Protection Insurance (LPI) covers you when you have to return your car because you can’t make payments due to illness or injury. Your insurance company pays the difference between what you owe and the car’s value.
You don’t get to keep the vehicle in this situation as it goes back to the dealer. However, this particular type of cover is usually very limited. Often, it might only apply for accidental death and not death caused by illness.
Tyre and Rim Insurance
This type of junk insurance has the task of covering your tyres and rims in case of a blowout, punctured tyres, or any kind of minor damage.
The issue with this policy is that it often costs more than repairing and replacing your tyres and rims.
Mechanical or Motor Breakdown Insurance
When you buy a vehicle, the dealer might offer extended protection for when the manufacturer’s warranty expires. Typically, this type of warranty covers everything listed in the statutory warranty and doesn’t start until your new car warranty expires.
This means you’ll have to pay for a policy you can’t claim for at least three years and often longer. Keep in mind that Australian Consumer Law provides consumer guarantees regardless of what type of warranty you receive from the dealer.
You've Brought a Junk Car Policy - Now What?
If you hold any of the policies listed above, you may be eligible for a substantial refund. ASIC has taken this issue seriously and has cracked down on some big names in the business.
Allianz, Suncorp and RAA Insurance have issued hundreds of millions in refunds over junk car policies, and the process is ongoing.
But how do you know if you’re eligible for a refund? Consider the following:
- Has the salesperson told you that you have to buy the insurance or warranty to get the car loan?
- Does your car insurance package contain products you were not told about and for which you did not give your consent?
- Are you currently not eligible for a claim under the policy’s specific terms even though you were told you could be?
Let Get My Refund Do All the Work for You
Having the correct information is the starting point for getting your car junk insurance refund. If you’re not sure about whether you’re eligible, let us check for you.
Get My Refund will take responsibility for the entire process and save you time and effort. All you have to do is fill out our straightforward online form, and we’ll do the rest. If we don’t get you a refund, we don’t charge a fee – that’s how you know we’ll leave no stone unturned.