Key takeaway: Thousands of Australians are receiving insurance refunds due to regulatory intervention by ASIC, premium overpayments identified through compliance reviews, and market-wide corrections following the pandemic. Refunds span car, home, life, and add-on insurance products, with amounts ranging from tens to thousands of dollars depending on the product and period affected.

What’s Driving the Refunds

A wave of insurance refunds is reaching Australian policyholders across multiple cover types, driven by regulatory enforcement, internal insurer reviews, and market corrections. The Australian Securities and Investments Commission (ASIC) has intensified scrutiny of premium pricing practices, uncovering systematic overcharging and unfair contract terms that have triggered remediation programs across the industry (ASIC, 2026).

The refunds fall into several categories: premium adjustments for periods of reduced risk (particularly car insurance during pandemic lockdowns and work-from-home periods), corrections for add-on insurance products sold through car dealerships and travel agents that failed to meet Target Market Determination requirements, and remediation payments for life and income protection policies where premiums increased beyond what was disclosed in the original Product Disclosure Statement.

According to ASIC MoneySmart, insurers are required to identify affected customers and issue refunds proactively when compliance breaches or pricing errors are discovered, though policyholders should verify they have received what they are owed (MoneySmart, 2026).

Car Insurance: Pandemic Premium Corrections

Car insurers are issuing refunds for policies held during 2020 to 2022, when Australians drove significantly less due to lockdowns and remote work arrangements. Comprehensive and third-party property insurance premiums are calculated partly on risk exposure, and the dramatic reduction in kilometres travelled and accident rates during this period created a mismatch between premiums charged and actual risk.

Major insurers including NRMA, AAMI, and others have initiated refund programs, with amounts typically ranging from A$50 to A$300 per policy year depending on the coverage type and state. The Insurance Council of Australia has encouraged all members to review their pandemic-period pricing and return excess premiums where appropriate (Insurance Council of Australia, 2026).

Policyholders who held comprehensive car insurance between March 2020 and December 2022 should check whether their insurer has contacted them about a refund. If not, contact your insurer directly and reference the pandemic premium review program.

Add-On Insurance: Regulatory Crackdown

ASIC’s targeted review of add-on insurance sold through car dealerships, travel agencies, and retail outlets has uncovered widespread mis-selling and poor value products. Many consumers were sold insurance they did not need, could not claim on, or that duplicated existing cover held elsewhere.

Refunds for add-on insurance products, including consumer credit insurance, gap insurance sold with vehicle finance, and travel insurance bundled with holiday packages, are being processed where the Target Market Determination (TMD) was not properly applied or where the sales process failed to establish suitability. These refunds can be substantial, as foundational consumer finance texts such as Principles of Finance explain, proper product design and disclosure are essential to fair pricing in insurance markets.

If you purchased insurance as part of a car loan, personal loan, or travel booking in the past seven years, review your paperwork and contact the seller to confirm whether you are included in a refund program.

Life and Health Insurance: Premium Increase Corrections

Life insurance, Total and Permanent Disability (TPD), and income protection policies have been subject to premium increase reviews where insurers raised premiums beyond what was clearly disclosed at the point of sale. ASIC identified cases where annual premium increases significantly exceeded the Consumer Price Index without adequate explanation or the ability for policyholders to switch to alternative premium structures.

Affected policyholders are receiving refunds for the excess premium amounts charged over the disclosed baseline, along with interest in some cases. This particularly affects policies sold between 2015 and 2020 before tighter premium increase disclosure rules came into effect.

If you hold life, TPD, or income protection cover, either directly or through your superannuation fund, check recent correspondence from your insurer or fund trustee about premium correction programs.

Read also: Australia’s Largest Insurer IAG Reports 138% Profit Increase Despite Cyclone and Flood Claims

How to Check If You’re Owed a Refund

Insurers are required to contact affected customers directly, but records issues and outdated contact details mean some refunds are not reaching their intended recipients. Take these steps to check:

  1. Review correspondence from current and former insurers over the past 12 months for refund notices or remediation program announcements.
  2. Log in to your online account with each insurer to check for pending credits or refund notifications.
  3. Contact insurers directly where you held policies during the affected periods (2015 to present for life insurance, 2020 to 2022 for car insurance, past seven years for add-on insurance) and ask whether you are included in any active refund or remediation program.
  4. If you held insurance through your superannuation fund, contact the fund trustee to ask about life and TPD premium corrections.

Keep records of all policies held, including policy numbers and coverage periods. If you believe you are owed a refund that has not been paid, you can lodge a complaint with the Australian Financial Complaints Authority (AFCA), which handles insurance disputes at no cost to consumers (AFCA, 2026).

Common Mistakes to Avoid

Do not ignore correspondence from insurers marked as remediation or refund notices, even if the amount seems small. Many refunds include interest, and accepting a refund does not prevent you from making a separate complaint if you believe the amount is insufficient.

Do not assume that because you have switched insurers you are not entitled to a refund from a previous provider. Refund programs cover former customers, and insurers are required to make reasonable efforts to locate and pay them.

Do not wait indefinitely to claim. While most refund programs remain open for several years, there are practical and legal time limits on how far back you can claim for premium overpayments.

What This Means for Future Premiums

The regulatory action driving these refunds has also prompted changes to premium pricing practices, disclosure requirements, and sales processes across the industry. Insurers must now clearly explain in the Product Disclosure Statement how and when premiums may increase, apply stricter Target Market Determination assessments before selling add-on products, and maintain better records of premium calculations to support regulatory reviews.

This should lead to fairer pricing and better value for policyholders going forward, though premiums are still influenced by broader factors including inflation, claims costs, reinsurance pricing, and natural disaster risk.

Conclusion

The wave of insurance refunds reaching Australian households represents both a correction of past pricing failures and a signal that regulatory oversight is tightening. If you held car, home, life, or add-on insurance over the past several years, take the time to verify whether you are owed money. Check insurer correspondence, log in to your accounts, and contact providers directly if you believe you should have received a refund but have not. The amounts can be significant, and you are entitled to what was overcharged.

For unresolved disputes or if an insurer is unresponsive, lodge a complaint with AFCA, which provides free dispute resolution services for insurance matters. Keep all policy documents, premium statements, and correspondence as evidence of what you paid and what cover you held.

General advice warning: This article provides general information only and does not take into account your objectives, financial situation, or needs. Before acting on this information, consider whether it is appropriate for you and read the relevant Product Disclosure Statement (PDS). Consider obtaining personal advice from a licensed insurance adviser or financial adviser regarding your specific circumstances. Product terms, exclusions, premiums, and refund eligibility vary by insurer, policy, and state or territory. Always verify current details directly with your insurer and read the PDS before making decisions about insurance cover or refund claims.