No one likes paying for insurance, but we’re all happy we have it when things don’t go as planned. However, this only applies when insurance works as it’s supposed to.
When applying for a mortgage, personal loan, or credit card, you’re placed in a vulnerable position. That’s why financial institutions may offer you Consumer Credit Insurance (CCI), a junk policy you don’t have to buy.
However, if you’ve been paying for CCI fees already, you might be eligible for a refund. Let’s go over the details of CCI insurance and see how you turn things around to your benefit.
How Does Consumer Credit Insurance Work?
The CCI is also known as Loan Protection Insurance, and it’s an entirely optional product. Its only purpose is to provide coverage if you can’t make payments in the event of job loss, illness or injury, or death.
It should also protect you if your credit card gets stolen or the goods you purchased with your credit card are damaged or stolen.
It’s also important to keep in mind that salespeople receive a commission when customers buy Consumer Credit Insurance. That’s why it’s almost certain that CCI will be on the menu when applying for a loan.
CCI - The Extra Insurance You Don't Need
Buying extra insurance is often the right move, but only if it provides great value for the consumer. Unfortunately, CCI is considered an extremely low-value product.
Still, banks and insurers have sold millions of policies to home loan and credit card customers. An ASIC review showed that a high number of CCI claims have either been denied or withdrawn.
In fact, for every $1 paid in premiums, only 19 cents were claimed for CCI products across the board. Furthermore, the CCI payouts are often less than what you expect, as it doesn’t cover all that you owe. Polices sold with credit cards tend to cover only a fraction of the outstanding debt.
On top of everything, you may already be covered for events listed under CCI. For example, your life insurance or income protection insurance already covers you in the events of illness, injury, or death. The same applies to your home insurance since it covers the goods you’ve purchased.
How Does One End Up With Unnecessary CCI?
If Consumer Credit Insurance is not mandatory and offers no real value, why do so many people still get it? Predatory practices from financial institutions are to blame. Here are a few examples of how CCI is sold:
- It’s added to existing loan paperwork without the client’s knowledge.
- It was discussed as a part of the insurance package and not a standalone product.
- It’s offered even though the client already has life, income, or home insurance.
- It’s sold to clients who might not even qualify for this type of cover (unemployed clients or someone working part-time.)
- There was no discussion about notable exclusions and clauses, such as some pre-existing medical conditions.
If any of the examples listed above apply to you, you’re probably eligible for a CCI refund.
However, you might not even know that you’re paying for CCI at all. Some insurance lenders include CCI into your loan documentation without any disclosure about it. It’s one of the most sneaky and dishonourable tactics we’ve come across.
If you were fortunate to receive your Certificate of Insurance, you could search for CCI on the list of sold products.
In terms of what you’ll need to provide, all you need is a policy number, period of insurance, and cost of premiums to reach out to your insurer and ask them to explain the itemised list in full.
Or Let Get My Refund Take Care of It
If it has been a while since you took out your loan or a credit card, you might not even be sure if you’re eligible for a refund. Fortunately, you don’t have to stress over that.
Get My Refund will take on the burden of checking whether you’ve been misled to buy Consumer Credit Insurance.
You can start your claim today and get your answers in record time. We’ll need your details and everything you can tell us about your finance agreements. We’ll submit your refund claim and only charge a fee if you’re successful.