In Australia, ongoing controversies have emerged around taxi club insurers and insurance-like schemes that fail to pay claims, particularly in Victoria where regulatory gaps allow unlicensed providers to operate. Several taxi and rideshare clubs market themselves as offering “insurance”, yet many do not hold an Australian Financial Services Licence (AFSL) required for regulated insurance businesses. This has left hundreds of drivers and third parties without adequate compensation after accidents, with claims delayed or denied and legal battles ensuing.
Critics argue that these clubs exploit legislative loopholes by structuring as incorporated associations, selling discretionary coverages rather than formal insurance. This means they can pick and choose when to pay, often imposing high excesses or ignoring claims entirely, leaving drivers personally liable for damages. Some drivers have faced court action and substantial debts after clubs failed to settle third-party claims, despite members believing they were covered.
Regulators like ASIC and APRA have been criticised for inaction, despite the requirement for licencing, while consumer advocates call for stronger enforcement and clear disclosure that such coverages are not standard insurance. The controversies highlight systemic risks in taxi industry insurance and ongoing calls for reform and regulatory action to protect drivers and other motorists.
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