In a landmark decision that's set to benefit hundreds of thousands of Australians, insurance heavyweight Allianz has agreed to a colossal $170 million settlement.

This payout results from a class action lawsuit concerning the sale of car dealer add-on insurance products, described as 'one of the largest consumer class action settlements in Australia.'

It's a significant victory for consumer rights and could mean a substantial sum of money in the pockets of eligible Aussies.

The class action, spearheaded by law firms Maurice Blackburn and Johnson Winter Slattery, targeted the 'add-on' insurance products sold at car dealerships from 1 June 2006 to 27 September 2021.

The lawsuit accused these products of 'no, or very limited value' and alleged that their sale breached legal standards.

A spokesperson from Maurice Blackburn shared that the settlement, reached without Allianz admitting any liability, is expected to affect around 200,000 individuals registered to participate.

A $170 million settlement has been agreed upon by Allianz Insurance over the sale of car dealer add-on insurance products. Credit: Cineberg / iStock

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'This is a significant outcome for consumers—it is one of the largest consumer class action settlements in Australia,' a spokesperson said.

'The sale of add-on insurance through car dealerships was widespread during the claim period and had been criticised by the Australian Securities and Investments Commission (ASIC) over many years.'

Car buyers paid a staggering $1.6 billion in premiums yet received a mere $144 million in successful insurance claims.

To put this into perspective, car dealerships earned four times the commissions, raking in $602 million.

The proposed Allianz settlement is now awaiting court approval, with a hearing scheduled for 11 March to determine its fate.

Maurice Blackburn is contacting potential beneficiaries through text messages, emails, and postal notices to inform them about the settlement.

No immediate action is required for those in the group affected unless they wish to object to the proposed settlement.

However, it's crucial to note that only those who registered for the class action before the 15 July 2024 deadline, at 4 pm, may be eligible for compensation, should the court give the green light.

Individuals who are eligible for a share of the $170 million compensation fund include those who purchased a vehicle from a dealership between 1 June 2006 and 27 September 2021

They also must have bought add-on insurance products like Loan Protection Insurance, Motor Equity Insurance, Extended Motor Warranty, or Tyre and Rim Insurance issued by Allianz.

This also applies to those who became liable to pay or already paid a premium for these insurance products.

This settlement serves as a reminder of the importance of being informed and vigilant about the financial products we purchase.

It also underscores the power of collective action in holding corporations accountable.

If you believe you might be entitled to a share of the settlement, now is the time to check your eligibility and ensure you're registered.

Not every day is such a significant sum returned to consumers, which could be a welcome financial boost for many.

Key Takeaways

• Allianz Insurance has agreed to a $170 million settlement over the sale of car dealer add-on insurance products, impacting potentially 200,000 consumers.
• The class action lawsuit, led by Maurice Blackburn and Johnson Winter Slattery, alleged that the insurance products sold had little or no value and were sold in ways that breached the law.
• The Australian Securities and Investments Commission (ASIC) had criticised the sale of such insurance, finding minimal financial benefit to car buyers despite significant premiums paid.
• The settlement is pending court approval, with a hearing on 11 March, and affected individuals who registered for the class action by 15 July 2024 may be eligible for compensation.

Have you been affected by the sale of these add-on insurance products? Share your story with us, and let's discuss the impact of this settlement on our community in the comments below.

 

[mylittletibbies]

When you purchase things such as a fridge, TV, washing machine etc you are always asked if you want to take out an extended warranty
This is also a rort because despite the product usually having a 12month warranty, such expensive items are, under consumer law, expected to be fit for purpose. lasting and true to description.
If you do not have any luck with the store or manufacturer you should contact the ACCC, it is not necessary to pay for an extended warranty.

 

[Bill MacL]

This is another reason why we, the customers, should be getting full disclosure from the insurance companies, they demand it from us. The banks did this a few years ago and they got caught, now it's their turn, about bloody time. Who's next? Come on ACCC, speed things up a bit.

 

[darrellh]

Also the lawyers get the bulk of this payout not the people who actually deserve the money and this happens every time. Lawyers always inflate their costs and they laugh all rhe way to the bank. The clients they actually represent are of no actual importance when it comes to the payout.

 

[CAMSHAFT]

Also the lawyers get the bulk of this payout not the people who actually deserve the money and this happens every time. Lawyers always inflate their costs and they laugh all rhe way to the bank. The clients they actually represent are of no actual importance when it comes to the payout.

 

[CAMSHAFT]

Allianz are rip off merchants. I had a no fault accident when someone ran into the back of me and did $15000 of damage. They continually refused to accept any responsibility and kept asking the same questions and just giving me the run around. My lawyers fees were $78000 I had to have two bouts of surgery on my shoulder too. They started to pay some medical bills and suddenly stopped. No explanation nothing. They are the worst Insurance Company bar non. Keep away

 

[Forban]

The number of times I have paid extra insurances at purchase of a car is incredible. Told it was beneficial for me

 

[moran and cato]

How do you check if you have been affected? I have purchased a car with add on insurance and extended warranty which was worth nothing to me?

 

[mylittletibbies]

How do you check if you have been affected? I have purchased a car with add on insurance and extended warranty which was worth nothing to me?

I'm not really sure but I think, with a class action, you usually have to have registered before the legal action starts
Check it out, but I think you may be too late.

 

[mylittletibbies]

I'm not really sure but I think, with a class action, you usually have to have registered before the legal action starts
Check it out, but I think you may be too late.

I just did a google search and it is possible to register after the case has been to court depending on the circumstances of the case. Whatever that means.
Maurice Blackburn was the legal firm handling the case.
If I was you I would give them a ring and enquire, you've got nothing to loose.

 

[Cheezil]

I don't believe I'll be a recipient, but it's annoying to think that those being ripoed off are the ones that have to defend their rights to compo & chase up the refunds, which should automatically be paid out to the victims of these insurance rogue/scammers without being chased. Hell i never heard anything about it until this article so if i had been affected it's a bit late to find out now!
Hopefully all victims got a chance/time to respond & get refunded!
So many sharks about, my Pop used to say never trust insurance salesmenor car salesmen, how true!

 

[Cheezil]

When you purchase things such as a fridge, TV, washing machine etc you are always asked if you want to take out an extended warranty
This is also a rort because despite the product usually having a 12month warranty, such expensive items are, under consumer law, expected to be fit for purpose. lasting and true to description.
If you do not have any luck with the store or manufacturer you should contact the ACCC, it is not necessary to pay for an extended warranty.

Agree thanks for letting others know too

 

[Cheezil]

Allianz are rip off merchants. I had a no fault accident when someone ran into the back of me and did $15000 of damage. They continually refused to accept any responsibility and kept asking the same questions and just giving me the run around. My lawyers fees were $78000 I had to have two bouts of surgery on my shoulder too. They started to pay some medical bills and suddenly stopped. No explanation nothing. They are the worst Insurance Company bar non. Keep away

Office of Fair Trading, productsreview.com.au for publicity (worked for me when i got the run around from TID (Travel Inurance Direct) after cancelled Jetstar flights due to ash cloud- one hour after i submitted the review I got fully refunded except for $100 worth of phone calls

 

[SGH]

I thought everyone knew these extended warranties were as useless as tits on a bull. All items purchased are designed to last for a certain period these days, and if you manage to get a good one you hang on to it until it basically dies. All electronic equipment will die somewhere between the end of the warranty period and the introduction of the latest buy for people who enjoy throwing their money away.

 

[Veggiepatch]

Allianz are rip off merchants. I had a no fault accident when someone ran into the back of me and did $15000 of damage. They continually refused to accept any responsibility and kept asking the same questions and just giving me the run around. My lawyers fees were $78000 I had to have two bouts of surgery on my shoulder too. They started to pay some medical bills and suddenly stopped. No explanation nothing. They are the worst Insurance Company bar non. Keep away

Ever dealt with QBE? Now THEY are the pits!

 

[Veggiepatch]

The number of times I have paid extra insurances at purchase of a car is incredible. Told it was beneficial for me

Ever thought that the seller of an item that offers an extended warranty gets a kickback (commission) from the insurer?

 

[mylittletibbies]

Ever thought that the seller of an item that offers an extended warranty gets a kickback (commission) from the insurer?

They do.

 

[Still Ebby]

When you purchase things such as a fridge, TV, washing machine etc you are always asked if you want to take out an extended warranty
This is also a rort because despite the product usually having a 12month warranty, such expensive items are, under consumer law, expected to be fit for purpose. lasting and true to description.
If you do not have any luck with the store or manufacturer you should contact the ACCC, it is not necessary to pay for an extended warranty.

True and if you really go into it some goods have a 5 year warranty

 

[Suzanne rose]

When you purchase things such as a fridge, TV, washing machine etc you are always asked if you want to take out an extended warranty
This is also a rort because despite the product usually having a 12month warranty, such expensive items are, under consumer law, expected to be fit for purpose. lasting and true to description.
If you do not have any luck with the store or manufacturer you should contact the ACCC, it is not necessary to pay for an extended warranty.

I just purchased a new fridge for my laundry. And paid $140 for and additional 3 years warranty. After bargaining and getting extra of the fridge I ended up paying exactly $1000 for fridge, extra warranty and delivery. The original pruce of the fridge was $1,198.

I did a similar warranty on my oven and cook top last year.

 

[mylittletibbies]

I just purchased a new fridge for my laundry. And paid $140 for and additional 3 years warranty. After bargaining and getting extra of the fridge I ended up paying exactly $1000 for fridge, extra warranty and delivery. The original pruce of the fridge was $1,198.

I did a similar warranty on my oven and cook top last year.

You know you don't need to, don't you.
Still sometimes it is the lesser of two evils because these companies don't exactly come to the party easily.
You usually have to kick up a big fuss and in some cases get ACCC involved.
A long drawn out process.
My sister in law had an extended warranty for her fridge, they had to repair it three times and when the warranty ran out it packed up again. She threatened to take them to court if they didn't give her a new one.
They thought she was bluffing and ignored her until they were served with the papers. New fridge turned up very promptly.