Despite the fact that many people still don’t understand what junk insurance is, educating yourself as much as you can on this subject could save you substantial amounts of money. It all boils down to the fine print, but who actually reads that stuff? We are talking about scams and unlawful activities that may occur when you obtain a personal loan or bank credit. If you’re not careful, you could fall victim to bank fraud. Fortunately, there are many ways to put things right in this scenario, and one of the best ones is to get your money back from your junk insurance. So, here are a few ways to accomplish that.
How to know if you’re paying junk insurance
You should examine your previous loan and credit card statements to find out if you were a victim of junk insurance. You might have been paying interest since these accounts may have also received regular insurance payouts. If you haven’t kept your previous statement, you can get in touch with your financial institution and ask that they provide it to you so that you can review the pertinent information. Pay close attention to terms like Consumer Credit Insurance (CCI), Guaranteed Asset Protection (GAP), Extended Warranty, Mortgage Protection, Loan Protection, and Mechanical Breakdown Insurance (MBI).
Consumer Credit Insurance (CCI)
Consumer credit insurance (CCI) offers protection for creditors in the event that they are unable to make their minimum loan installments due to unemployment, illness, or accident, or if they pass away before making the remaining loan payments. CCI is typically offered as an option by lenders to customers who are taking out a credit card, line of credit, or mortgage.
Many of these policies were marketed to customers who weren’t qualified to file claims, weren’t likely to profit, or didn’t require coverage. There was a lot of usage of improper sales tactics and pressure selling. A number of organizations that were involved in deceptively selling CCI to customers are the subject of enforcement investigations launched by the Australian Securities and Investment Commission (ASIC). In order to make sure that clients who have not been handled properly are appropriately remediated, lenders will be obliged to repair over 300,000 affected clients with over $100 million through insurance refund. Another update on this program is expected to be provided by the end of this year.
Guaranteed Asset Protection (GAP)
In the unfortunate event that your car is written off, damaged in an accident, or stolen, Guaranteed Asset Protection (Shortfall or Motor Equity Insurance) is an optional add-on insurance or junk insurance product which should help cover the difference between your insurance pay-out & the remaining balance on your loan.
When getting a purchase loan for an automobile, borrowers should be given the option of gap insurance. If you were ever in the predicament of not being able to pay the full amount due on your auto finance agreement and wanted to avoid and cover the occurrence of necessitating the payment of a car you no longer have, this product is sold with the suggestion that it will grant you peace of mind. The problematic issue is that it’s not uncommon for lenders to covertly add such extra product to the documentation for your initial auto loan as if it were a standard feature and not an extra expense.
You shouldn’t have been sold GAP insurance if you don’t have comprehensive insurance.
Extended Warranty
An optional plan you can purchase to aid you in covering the cost of some repairs your car might require while you own it is an extended warranty, commonly known as a vehicle service contract. It normally starts when the manufacturer’s warranty expires, however occasionally the two start at the same time. Regular maintenance, like oil changes, new tires, new brakes, and other similar items, is typically not covered by extended warranties either. Additionally, roadside assistance is frequently purchased separately.
The fine print of an extended warranty should be carefully reviewed to determine what is and is not covered. Due to the numerous exclusions, an issue with extended warranty coverage is that it is almost useless for used cars. The Australian Consumer Law protects consumers’ rights regarding quality, so purchasing extended warranties is not required.
What is your next step?
If you learn that you might be entitled to a refund or compensation, one of your options is joining the class action. The second one is filling out an opt-out form and mailing it by the deadline to the appropriate Court (Federal or Supreme). The insurance firm has these forms on hand. If you don’t know exact dates, it could be difficult for you to ask your bank for the policy documentation. Banks are supposed to inform their customers of class actions, but frequently people don’t receive or even view the notice because their email addresses change. Theoretically, you may ask a refund firm to look into your insurance before pursuing it on your own.