Consumer confidence in mortgage payment protection insurance drops
- 5TH JUNE 2007
The sales of mortgage payment protection insurance (MPPI) have dropped drastically since the payment protection insurance sector as a whole was found to be rife with poor sales processes and mis-sold policies. This means that many homeowners are leaving themselves financially wide open should disaster happen.
Mortgage payment protection insurance is taken out to cover the cost of your monthly mortgage repayments should you find yourself out of work due to accident, prolonged sickness or involuntary unemployment. The cover will help you to carry on paying your mortgage and any other related costs such as home insurance, typically for up to one year.
However since the investigation into the sector by various government organisations (the Citizens Advice, the Office of Fair Trading and the Financial Services Authority) many have found that they have been mis-sold their policy and cannot claim on it, which has led to large numbers of compensation complaints.
Another factor the Financial Services Authority is looking into is the way the high street bank in particular monopolises the sector. Around 80% of the policies sold are bought alongside the mortgage with the banks and lenders charging ridiculous amounts for the protection. This is mainly due to the consumer’s ignorance over the fact that they can purchase protection independently.
Purchasing mortgage payment protection is essential without a doubt and purchasing independently is the cheapest way to give yourself peace of mind. British Insurance is one such independent company who can offer the consumer a quality product while saving them up to 40% on their premiums when compared to the high street banks.
