RACQ accused of sending 570,000 renewal documents with wrong premium

One case allegedly saw RACQ hiking up a customer’s premiums by 40%, said ASIC.

RACQ Insurance Limited is accused of sending over 570,000 renewal documents to customers containing false or misleading premium amounts.

In a case filed by the Australian Securities and Investment Commission (ASIC), RACQ is accused of sending over 570,000 documents containing representations about a “last period premium” amount between September 2019 and December 2024.

ASIC said that the amount in the documents RACQ sent was higher than what customers paid or were paying after negotiating discounts or making a change to their policy that affected the premium.

“During a cost-of-living crisis, we believe RACQ misled thousands of customers by including false comparison pricing in their renewal documents,” said Sarah Court, deputy chair, ASIC.

ASIC also alleged that RACQ knew that the “last period premium” in its renewal documents was misleading customers because the insurer started receiving complaints just two days after commencing the practice.

The commission is seeking declarations, civil penalties and publicity orders from the Federal Court.

In its online statement, ASIC cited a RACQ customer received a renewal notice that their new premium was A$7,033.57, which is a 1.5% increase based on a supposed last period premium listed at A$6,930.55.

However, the customer was actually paying a premium of $5,024.18, which meant that RACQ had hiked their renewal premium by 40%, ASIC said.

“‘We are concerned this conduct deprived Australians of the opportunity to compare their renewal information against other insurers to find the best value for money,” Court said.

ASIC said the last period premium was included on renewal documents for many different types of cover including home and contents, car, caravan, boat and pet insurance.