Junk Insurance is a term used to describe add-on insurance policies that are essentially useless to the consumer that it was sold to.
According to the Consumer Law Action Centre in Australia, it is estimated that Australians could have been sold more than $60 billion worth of junk insurance over the past ten years. Many people had been sold policies they would never be able to claim on, and there were others who didn’t even know they had been sold certain insurance policies in the first place. Their data also showed that it wasn’t just banks selling these junk insurance policies to consumers, but also car dealers, retailers and insurers.
ASIC have been doing a fantastic job of securing over $160 million for consumers to date.
Junk Insurance comes in an assortment of different guises, which is what often makes it so hard to spot when you’re trying to find the best insurance cover for any situation for those who aren’t experts in the field. We can often get caught up in all the industry jargon and the stress and pressure of trying to cover every possible scenario where you could use the support of an insurance claim. The scare tactics alone where we are unknowingly coerced into considering every “worst case scenario” possible in your lifetime (no matter how outrageous or unlikely they may be) is enough to make anyone sign the dotted line out of pure fear.
First of all, most people will not know in the first instance that they have been sold junk insurance. It is usually cleverly hidden within all of the industry lingo and wordy contracts that the average customer has no chance of understanding.
Go through your contracts at your own speed, and clarify anything that confuses you. You will need to do some extra homework and thoroughly go through all your insurance documentation yourself, even after the insurance broker has already gone through it with you. Clarify the words or statements that aren’t spelled out in layman's terms, and make sure you can say with confidence that you understand the entirety of your contract. Don’t be scared to ask for help with this elsewhere too, from someone who can translate the industry speak. Check that the policy actually provides the cover that you’re after, and make sure that you know exactly what you want from an insurance policy before you go signing on the dotted line.
Even if the loan is active or paid out:
Thankfully this is where our industry expertise comes in!
We take assist you with claiming back