What Is Junk Insurance?
Junk insurance is add-on insurance that is usually sold at the time of applying for a credit card or loan. These insurances are so called “junk” because they are often sold without the customer's genuine and informed consent and can be of little or no value to the customer.
The Banking Royal Commission revealed that millions of Australians had paid for junk insurance policies which were often sold using unfair sales practices and high-pressure tactics. These insurances can cover non-essential items, are often double-ups of insurances that consumers already hold or can even sometimes already be covered by Australian Consumer Law.
Remediator’s insurance refund specialists can help you identify and claim refunds for mis-sold junk insurance policies from your bank or insurer.
Examples of commonly sold “junk” insurances include:
Consumer Credit Insurance (CCI)
Guaranteed Asset Protection (GAP)
Extended Warranty Insurance
Scratch & Dent Insurance
Tyre & Rim Insurance
Common Types Of Junk Insurances:
CCI is consumer credit insurance.
CCI is sold with credit cards, personal loans, car loans and home loans and provides cover for consumers if they are unable to meet their minimum monthly loan repayments due to unemployment, sickness or injury (subject to policy terms) or to pay an outstanding loan balance upon death.
CCI is optional and usually sold at the time of applying for the credit card and loan.
Many of these policies were sold to consumers who were ineligible to claim or unlikely to benefit or need cover. Pressure selling and unfair sales practices were often used.
GAP insurance is Guaranteed Asset Protection.
It is designed to cover the gap of what you owe under your car loan and what your comprehensive car insurer will pay you if your car is written off. If you do not have comprehensive insurance, then you should not have been sold GAP insurance.
Unfair sales practices were often used in the sale of this product.
3. Extended Warranty?
Extended Warranty insurance is where the consumer pays a fee in return for the warranty provider agreeing to repair or replace parts or components of goods in the event of defects or failures. This is also called Mechanical Breakdown Insurance.
A problem with extended warranty cover is that it is almost completely worthless on second-hand vehicles given the many exclusions. Consumers rights over quality are protected by Australia’s Consumer Law and therefore buying extended warranties is not necessary.
To see if you might be eligible for a junk insurance refund contact our refund specialists at Remediator on 1800 984 707 or click here to begin your process in claiming you refund back.