Why is VSC providing refunds?
VSC has been working with ASIC (the financial services regulator) in relation to the sale of motor add-on insurance products. ASIC has been looking into the sale of motor add-on insurance products across the whole industry and has found that a number of customers have been sold policies they did not need or were sold more cover than they needed.
Why don’t you have my bank details on record?
VSC does not collect this information from customers. We do not share all information with the financiers and therefore have no record of your bank details.
This is not the interest rate on my finance loan, why have you applied a different interest rate?
VSC has applied an interest rate which was calculated based on the cash rate published by the Reserve Bank of Australia as a guide. We did not have access to the rate of interest on each impacted customer’s finance loan thereby we were not able to apply a tailored rate.
The letter says that I should reply within 30 days. Can I still receive my refund after this time?
Yes, you can request a refund after this time.
Will my policy be cancelled if I receive a refund?
If we’re giving you the option of cancelling your policy, it’s because we think you may have paid for cover you didn’t need, and we want to refund your premium.
Because you’ve signed a contract with us, we can’t cancel your policy unless you request us to.
Why am I only being offered a partial refund?
If you have been offered a partial refund, it is because you have a GAP insurance policy. We’re giving some of our GAP insurance customers a partial refund of their GAP insurance premium as we believe they had at least one year’s worth of ‘New for Old’ comprehensive insurance cover, provided by their car insurance cover.
If you wish to cancel your policy and receive a full refund, please follow the instructions on your letter.
What if I still want to make a claim on my policy?
If you’re also eligible for a partial refund, we’ll pay you that partial refund. We won’t cancel your policy and you’ll continue to be covered until it expires.
If you cancel your policy, you can’t claim for any incident which happens after you cancel.
How long will the payment take to be received?
Where we have verified that you still have an active finance loan we have sent the money to the financier to apply directly on your finance loan.
Where you no longer have an active finance loan we are seeking information on your preferred method of payment.
If EFT is your preferred method, payment into your nominated bank account may take up to 15 business days to be processed once we receive your details. You will receive a confirmation email from us once the payment has been processed.
FAQs SPECIFIC TO GAP INSURANCE
Could my GAP insurance policy be suitable for me?
You may want to keep your GAP insurance policy if you believe you have a ‘gap’ to be insured. This could occur if the value of your vehicle has fallen and it is worth less than your outstanding balance under your finance agreement, if you don’t have ’New for Old’ cover or if you only have it for a short period of time. You should consider your own circumstances, read the PDS and may want to seek appropriate advice before making a decision.
Why a GAP insurance policy might not be suitable if you paid a large deposit
We’ve identified that customers who were sold GAP insurance policies and who paid a deposit of more than 20% upfront for the vehicle were unlikely to benefit from their policy because there was unlikely to be a gap to insure. This is because, even though the value of a vehicle falls over time, due to having paid a large deposit the value of the vehicle was unlikely to fall below the balance owed under the finance agreement.
Why are you asking for confirmation of my Comprehensive Motor Vehicle insurance?
We’re giving some of our GAP insurance customers a partial refund of their GAP insurance premium as we believe they had at least one year’s worth of ‘New for Old’ comprehensive insurance cover, provided by their car insurance cover.
You may be eligible for a larger refund, up to the maximum of your GAP insurance policy premium, if you held ‘New for Old’ cover for a longer period of time. Your certificate(s) of insurance will help us assess this and we will be able to recalculate your refund, so please send us a copy. If you can’t find your certificates(s), contact your Comprehensive Motor Vehicle insurer and ask them for a copy.
How having ‘New for Old’ cover can mean GAP insurance might not be suitable
Most comprehensive motor vehicle insurance policies include ‘New for Old’ cover, so if you bought your vehicle in new condition and it is written off or stolen during the time you have this cover, your insurer would simply replace your vehicle instead of paying you or your financier a lump sum. Depending on your comprehensive motor vehicle insurer, you could potentially have had up to 4 years of this cover.
Customers with ‘New for Old’ cover were unlikely to claim under their GAP insurance policy because their comprehensive motor vehicle insurer would have replaced their vehicle, meaning they wouldn’t have had a ‘gap’ to pay.