Lawyers weigh up add-on insurance class action
Sydney-based Bannister Law is investigating a potential class action against seven general insurance companies providing add-on insurance through car dealers.
It follows intervention by the Australian Securities and Investments Commission (ASIC), which found the products can be expensive, poorly designed and sold in a high-pressure environment to customers who do not need them.
Since ASIC became involved insurers have been working to improve the performance of add-on products so they are cheaper and better meet consumer requirements. ASIC has also been consulting with the industry on a deferred sales model that would alleviate pressure tactics.
Bannister Law is at present working on five class actions, while another 10 – including the add-on insurance issue – are “under investigation”.
The firm has asked people to register their interest and provide information about their experiences. Questions include whether the buyer was aware they were purchasing add-on insurance, whether they felt pressured and if they had found the product too complex.
It says if consumers “were convinced at the dealership to take out any add-on insurance product, chances are you obtained little financial benefit”.
Potential targets for the action include Aioi Nissay Dowa, Allianz Australia, Eric Insurance (formerly Avea), Swann Insurance, MTA Insurance, NM Insurance and QBE.