More than 200,000 Australians are set to receive a share of a $170 million payout from a class action lawsuit against Allianz, following a lengthy legal battle over insurance policies sold by car dealers. Cheques are expected to be distributed before the end of the year.
Law firm Maurice Blackburn, which led the class action, is overseeing the distribution of the settlement funds. While the exact amount each customer will receive has not been disclosed, one claimant has been informed of a potential payment of $555.52, which is anticipated to be a common sum.
Customers with surnames beginning with A through M have until Wednesday to officially claim their share. Notifications for other claimants will follow. The settlement concludes a six-year legal dispute that originated from a government watchdog investigation into 'add-on' insurance products commonly offered to car buyers.
These policies, including Loan Protection Insurance, Motor Equity Insurance, Extended Motor Warranty, and Tyre and Rim Insurance, were issued by Allianz and were often encouraged for customers taking out car loans between 2006 and 2021. The Australian Securities and Investments Commission (ASIC) had previously found that these add-on insurances provided 'little, if any, financial benefit.'
During the period in question, consumers paid over $1.6 billion in premiums for these policies, but only $144 million was disbursed as claims. In contrast, car dealerships earned approximately $602 million in commissions from upselling these products. The lawsuit contended that the policies were largely ineffective and were sold in ways that violated consumer protection laws.
"This is a significant outcome for consumers – it is one of the largest consumer class action settlements in Australia," a spokesperson for Maurice Blackburn stated. "The sale of add-on insurance through car dealerships was widespread during the claim period, and had been criticised by ASIC over many years."