Swann add-on insurance refunds

Are you owed a refund for your Swann add-on insurance?

Swann Insurance is refunding $39 million to 67,960 customers who bought add-on insurance through car dealerships across Australia.

Here we explain what insurance products are being refunded, who is entitled to a refund and how to contact Swann if you have any questions about the refund process.

Am I entitled to a refund from Swann?

You may be entitled to a refund if you bought Swann insurance products when you bought a car or motorbike. Check your car or motorbike loan documents if you're not sure whether you bought insurance, or what brand it is.

Not all customers are entitled to a refund, and some customers will need to decide whether to keep the cover under their policy or cancel it and get a refund. 

Swann will email all affected customers with details of its offer from the beginning of February 2018. If you don't receive an email, but you think you might be eligible for a refund, you can contact Swann on 1300 149 292 or by emailing addon@swanninsurance.com.au

Swann will be offering these refunds until 30 September 2018. If you receive an email from Swann but do not contact them for a refund, they will assume you would like to keep your policy and don't need a refund.

What insurance products are included in the refunds?

 The refunds cover the following six add-on insurance products:

  • GAP insurance
  • Purchase price protection insurance
  • Loan protection insurance
  • Walkaway insurance or Protection Plus insurance
  • Tyre and rim insurance
  • Mechanical breakdown insurance (MBI).

What will my refund be?

Swann will be offering either a full or partial refund of the premiums you have paid.

All refunds will include interest.

What if I disagree with Swann's refund offer?

If you are not happy with the refund offered by Swann, you can contact them on 1300 149 292 or by emailing addon@swanninsurance.com.au

If you are not happy with how Swann handles your complaint, you can ask for it to be escalated to their internal dispute resolution process.

If Swann 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 Swann's refund.

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

Swann'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 Swann on 1300 307 926 or emailing info@swanninsurance.com.au.

If you are not happy with Swann'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 

Why is Swann refunding customers?

The refunds are being paid because Swann sold add-on insurance that provided little or no value to customers. The insurance provided little value because:

  • some customers were unlikely to be able to make a claim as their car was insured for more than the amount they borrowed
  • the cover under the GAP policy duplicated existing cover from comprehensive insurance policies
  • customers were sold more insurance than they needed
  • customers did not receive a rebate under their GAP policy when they paid off their loan early.

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

What is 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. Walkaway or loan termination insurance is also a type of CCI that covers the difference between what you owe on your loan and the market value of the car if you return it because you can no longer make repayments due to illness or injury, or for other reasons listed in the product's terms and conditions.
  • Tyre and rim insurance - Covers damage to tyres and rims that occur as a result of blowouts, punctures and various road hazards (like driving over a pothole).
  • Mechanical breakdown insurance (MBI) - Provides some cover for repairing or replacing parts of the car due to mechanical failure after the manufacturer's or dealer's warranty expires. Sometimes MBI is called extended warranty insurance, because it commences after your new car warranty ends.

Why is ASIC concerned about add-on insurance?

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

ASIC's review found that customers received low payouts compared to the high premiums they paid. The payouts were also much less than the commissions car dealers received for selling them the insurance.

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 buy add-on insurance from a car dealer, find out what insurance you already have so you don't get more cover than you need. If you do decide to get add-on insurance, make sure you understand its benefits and exclusions and 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