\u201cWe were told we had to have it because the loan was a certain amount of money,\u201d Nick said.<\/p>\n
Know the news with the 7NEWS app: Download today Arrow<\/a><\/p>\n \u201cIt was of no benefit to us. It wasn\u2019t to protect us, it was to protect them \u2014 the bank. <\/p>\n \u201cWe paid a rather large amount of money for nothing.\u201d<\/p>\n The policy, which added directly to the cost of servicing the loan, was meant to provide life and disability cover in the unfortunate event something happened to him.<\/p>\n Experts say these products can become problematic because people are often paying for cover they already have through their superannuation<\/a>.<\/p>\n More than a decade after taking out the home loan, Nick decided to check whether he had been charged for unnecessary insurance or fees.<\/p>\n Claimo, which is among companies that investigate junk insurance and handle compensation claims on behalf of customers, reviewed Nick\u2019s loan and found more than $26,000 in premiums had been added to it.<\/p>\n The company pursued the matter with the bank and secured a further $15,689.16 in loan and compensatory interest, taking Nick\u2019s total refund to $41,838.<\/p>\n \u201cWe paid the mortgage off and had a little bit of cash left over for a holiday,\u201d Nick told 7NEWS.com.au.<\/p>\n \u201cIt made us debt-free. It was an amazing amount of money.\u201d<\/p>\n Claimo managing director Nathan Mortlock said Nick\u2019s case sits squarely within the broader junk insurance remediation that followed a Royal Commission<\/a> into Misconduct in the Banking, Superannuation and Financial Services Industry.<\/p>\n The commission\u2019s report revealed that millions of people had been duped into buying junk insurance, which refers to coverage that\u2019s either unnecessary or worthless.<\/p>\n \u201cThe banks ultimately set aside billions of dollars to compensate customers for problems across wealth, insurance and other financial products, including consumer credit insurance,\u201d Mortlock said.<\/p>\n \u201cThese policies were commonly sold alongside home loans, personal loans and credit cards, and were meant to provide a safety net if someone became sick, injured, unemployed or died.\u201d<\/p>\n A vice principal received a $6500 refund<\/a>\u00a0after Claimo looked into junk insurance attached to two car loans, while a mother previously told 7NEWS.com.au she could finally \u201cbreathe and look forward to the future\u201d after pocketing $111,000<\/a> following an investigation into mortgage protection she was sold.<\/p>\n \u201cThe problem was that many people were paying for cover they didn\u2019t need, couldn\u2019t properly claim on, already had elsewhere, or in some cases didn\u2019t even realise had been added to their loan,\u201d Mortlock told 7NEWS.com.au.<\/p>\n The junk insurance message for millions of Australians<\/p>\n Claimo, which takes a 30 per cent fee from any refund it helps secure, has encouraged Australians to review historic lending arrangements tied to home, car, and personal loans, credit cards and other consumer finance, saying millions of consumers could be impacted by junk insurance problems.<\/p>\n The Australian Financial Complaints Authority (AFCA) received 7880 complaints about add\u2011on or junk insurance in 2024-25.<\/p>\n \u201cWe resolved more than 4500 of these complaints, helping to deliver better outcomes for affected consumers,\u201d the authority<\/a> said.<\/p>\n \u201cComplaints commonly raised concerns about unfair sales practices, poor product design, inadequate disclosure and instances of misrepresentation or undue pressure.\u201d<\/p>\n <\/p>\n Australia\u2019s highest paying jobs that don\u2019t require a degree<\/p>\n 2 min read<\/p>\n![\"An](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/08\/9a1d7b51f7e4c87d1d6aa821ac654c51a769588f.jpg\")
An Australian man received $41,838 following an investigation into insurance tied to his home loan. Credit: Asadnz\/Getty Images\/iStockphoto<\/p>\n