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INSURANCE PRODUCTS
Compulsory third party insurance (CTP) or ‘greenslip’, as it’s most commonly known as in NSW, is legally mandated in all states within Australia. It provides cover for legal liability for injury and death as a result of an accident for which the insured is responsible – be it for other drivers, passengers, pedestrians or cyclists. In most states this is included in your registration fees, however if you’re from QLD or NSW you have the option of choosing a CTP provider.
It’s important to be aware that in an accident, CTP won’t insure you for any damage caused to you or any one else’s car or property. Therefore the safest way to protect yourself from nasty surprises is to consider comprehensive insurance over and above any imposed state regulatory cover.
When you finance the purchase of a motor vehicle of other goods with AFS, it is a requirement of the loan contract or lease to have the security comprehensively insured at all times during the contract term. As a consequence, you must organise insurance before delivery by transferring your current insurance or arranging new cover. AFS will finance comprehensive insurance from the insurer of your choice, provided they are an insurer that has been authorised by the Australian Prudential Regulatory Authority (APRA).
With comprehensive insurance you will generally be covered for accidents, fire and theft as well as any third party damage you may be legally liable to pay. You should read the Product Disclosure Statement for the product you intend to purchase so that you understand exactly what is covered, the benefits for each level of cover, and what the limits and exclusions are.
AFS prefers 12 months Comprehensive Insurance to be financed by the credit contract but also accepts:
  • Pay-By-The-Month Insurance; or
  • Transfer of an existing insurance policy.
A Certificate of Currency or Notification of Insurance must be supplied at Settlement, noting Automotive Financial Services Pty Limited (AFS) as an interested party.
When financing of insurance premiums over mortgaged property, AFS must not knowingly provide credit to the debtor to pay the premium or finance the premium on insurance taken out by the debtor over mortgaged property for a period of insurance exceeding 1 year, but may provide credit for or finance successive premiums for periods of 1 year or less.
Important Notice
Please ensure you have received, read and understood the Product Disclosure Statement and Policy Wording (PDS) and what the limits and exclusions are for each product before you purchase them.
It is important to note:
  • You cannot be forced to take out any type of insurance;
  • You cannot be forced to take out insurance with a particular insurer;
  • Details of the other types of insurance covers the authorised representative can issue, along with the way in which they are remunerated, are disclosed in their Financial Services Guide;
  • If you purchase an insurance policy and decide within 14 days that it doesn't meet your needs, for whatever reason, you can cancel for a full refund less any taxes or duties that the insurer cannot recover. This is called the Cooling Off Period; and
  • If you have any queries or a complaint about an insurance product offered to you, you should follow the complaint handling procedures detailed in the insurer's Product Disclosure Statement.
AFS is an advocate for prohibiting the financing of premiums for add-on insurance products (except comprehensive insurance) through the related credit contract or lease and submitted a response to ASIC regarding CP294 on 14th September 2017.
Refer AFS Submission Re CP294

 

Add-On Insurance - Non-Permitted Products
Whilst ASIC continues to consult with industry regarding the sale of add-on insurance, AFS made an ethical decision to ban the financing of add-on insurances, including but not limited to:
  • Consumer Credit Insurance;
  • Gap Insurance;
  • Total Loss Insurance;
  • PPP Insurance;
  • Tyre & Rim Insurance;
  • Warranty Insurance; or
  • Any hybrid insurance products
(together the “Non-Permitted Products”)
In addition, if you are arranging your insurance through a finance broker, insurance broker, or car dealer they must not arrange a side-loan to finance the cost or premiums of add-on products without notifying AFS for the purpose of calculating your financial position.
Furthermore, the finance broker, insurance broker, or car dealer must not include the cost or premiums of add-on products in the invoice price of the car to ensure you are not paying unnecessary government charges and interest due to the bundling of add-on products into the sale price of the car.

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