Insurance giants Allianz and Suncorp will be paying back more than $62 million over 109,000 customers, after a government investigation into questionable car insurance policies.
Acting Australian Securities and Investments Commission (ASIC) chair Peter Kell said the insurers had agreed to refund $62.8 million in add-on premiums sold through car dealerships, which were deemed to be of “little to no value”.
“Add-on insurance has been under the spotlight for some time now. Insurers should be taking active steps to ensure their customers are not being sold products that provide little or no value,” he said.
“ASIC's work on add-on insurance is all about making sure customers are being sold insurance that meets their needs and if they haven't, are appropriately remediated.”
Suncorp will refund $17.2m to 41,428 of its MTA Insurance customers, with Allianz refunding 68,000 customers a total of $45.6m.
The move follows a two-year investigation of dodgy car insurance policies by ASIC has undertaken a two-year pursuit of questionable add-on insurance policies sold through car dealers.
In 2017, Swann Insurance refunded customers $39m in add-on insurance premiums, while QBE refunded customers $15.9m.
Mr Kell added: “Our message to insurers is simple: the needs of your customers must come first in the design, price and sale of your products."