QBE add-on insurance refunds

Are you owed a refund for consumer credit or gap insurance? 

QBE Insurance is refunding up to $16 million to over 36,000 customers who bought add-on insurance through car dealerships across Australia. The refunds are being paid because QBE agreed that customers were sold insurance that provided little or no benefit.

Here we explain who is entitled to a refund and how to contact QBE if you have any questions about the refund process.

Am I entitled to a refund from QBE?

You may be entitled to a refund if you bought QBE branded Guaranteed Asset Protection (GAP) or Consumer Credit Insurance (CCI) when you bought a car between 2011 and 2017. 

If you bought a car between these dates, you should check if you bought QBE GAP or CCI insurance. 

QBE will be writing to all affected customers from 2 August 2017. If you don't receive a letter and you think you might be eligible for a refund you can contact QBE:

What will my refund be?

All eligible customers who bought QBE GAP insurance will be refunded at least a year's worth of GAP insurance premiums because the 'new for old' cover included in their comprehensive car insurance from any insurer would have provided similar cover as the GAP insurance for at least the first year. 

You may also be eligible for a further refund of your GAP premium if you:

  • paid a large deposit for your car (which means you were unlikely to need GAP insurance)
  • were sold more GAP cover than you needed
  • paid off your loan early.

If you are under 25 and bought the QBE CCI insurance, you will be offered a refund for the cost of the life and trauma element of the insurance. This is because you are unlikely to have dependents who would rely on the insurance to meet loan repayments if you died or could no longer earn an income.

The average refund will be around $400 but could be as high as $3,000. All refunds will include interest.

What if I disagree with QBE's refund offer?

If you are not happy with the refund offered by QBE, you can call QBE's Customer Care Unit on 1300 650 503. If you are not happy how they handle your complaint, you can ask for it to be escalated to a QBE dispute resolution specialist. Visit qbe.com.au/complaints for information on how to do this. 

If QBE takes more than 45 days to respond to your complaint, or if you're not happy with how it has been handled, you should contact the Financial Ombudsman Service on 1800 367 287 or visit fos.org.au.

You can complain even if you accept QBE's refund.

What if I'm not covered by QBE's refund program?

QBE's refund program covers customers ASIC has identified were sold insurance with little or no value.

However, other customers may also be entitled to a refund. For example, you may have bought the policy because the sales person said you had to buy the insurance to get the loan.

You can raise concerns about your policy or how it was sold to you by calling QBE on 1300 650 503 or emailing complaints@qbe.com.

If you are not happy with QBE's response to your complaint you can contact the Financial Ombudsman Service on 1800 367 287 or visit fos.org.au

You can also receive information or help from:

The Consumer Action Law Centre (Victoria only) 
The Insurance Law Service 

What's add-on insurance?

There are many different types of add-on insurance policies that might be sold to you when you buy a car at a car yard. These include: 

  • GAP insurance - Covers the lender for the difference between what you owe on the car loan, and what the car is insured for under comprehensive car insurance, if you write your car off. You can also buy 'purchase price gap insurance' that's not linked to a loan. This type of gap insurance pays you the difference between what your comprehensive car insurance pays out, and what you paid for the car. 
  • CCI insurance - Provides some cover if you can't meet the repayments on your loan if you die, suffer a traumatic illness (such as cancer), or become disabled or unemployed. If you need to claim, the money will go to your lender, not you.

ASIC's review of add-on insurance

These refunds are a direct result of ASIC's 2016 review of the sale of add-on insurance through car dealers, which uncovered the wide-spread sale of insurance with little or no value to customers.

What were ASIC's concerns about QBE?

ASIC was concerned that QBE's CCI add-on insurance was sold to young people who had no dependents and were unlikely to need the cover.

ASIC was also concerned that QBE's GAP insurance was sold to customers who did not need it because:

  • there was no gap to cover, for example because they paid a large deposit, or
  • customers already had similar insurance cover, or
  • customers were sold more insurance than they needed.

To find out more, see ASIC's media release.

Other refunds following ASIC's investigation into add-on insurance

ASIC has identified unfair conduct by a number of insurers who offer add-on insurance and extended warranties by car dealers or finance brokers. As a result, these insurers have agreed to refund over $120 million to customers who were sold these products.

For more information, see add-on insurance.

Before you get add-on insurance with your car loan, make sure you'll benefit from the insurance or don't already have similar cover from your comprehensive car insurance. If you do decide to get add-on insurance, consider paying for it up-front instead of adding it to the cost to your loan.

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Last updated: 29 Nov 2018