South Australian insurer RAA is paying out 180,000 current and former members whose insurance policies did not align with advertised promotions.
The payout is a result of an external review into the RAA’s pricing, which found overcharged premiums, GST, stamp duty and interest.
An Australian Securities and Investments Commission review in 2021 saw almost a dozen of Australia’s largest insurers paying customers $815 million over broken promises.
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ASIC then called on general insurers to fix pricing failures and complexities.
The RAA wasn’t part of the ASIC review but said to get on the “front foot” of any issues, it commissioned its own review.
About 30,000 RAA customers have already been reimbursed following the report.
The amount customers will be refunded depends on the type, value and number of policies they held.
Most will receive a small sum of money back, some as low as $5, while others who had multiple policies over long periods will be refunded more money.
RAA Insurance chief executive Tara Page said more customers will be contacted for refunds in the coming days and weeks.
“RAA holds itself to an extremely high standard, and we always try to do the right thing by our members,” Page said.
“We’ve set up a dedicated team to help get that money back to members as quickly and securely as possible, and also support them if they have any questions or concerns.”
The RAA’s review found marketing and promotional material about how insurance discounts are applied was misleading.
Customers were told in some instances discounts applied only to base premiums and there were minimum premiums applicable.
A company spokesperson said while marketing of discounts was problematic, the prices were always consistent with product disclosure statements.
