Keep an eye on the small print
- 1ST MAY 2007
Consumer watchdog Which? has warned consumers to keep an eye on the small print of any insurance policies they buy as many have hidden exclusions buried away in the small print. And the warning is quite right so.
With just 15-20% of payment protection insurance (PPI) claims actually being accepted, this area of insurance has the lowest successful claims ratio compared to home and motor insurance which are both have well over a 70% claims acceptance rate.
But, says Simon Burgess from ethical standalone payment protection provider British Insurance, it isn’t just about the exclusions. He says:
“Certainly, stress and backache, which are the two most common reasons why people go off sick from work, are excluded from a lot of payment protection insurance policies. Sadly, many policyholders are unaware that these health complaints are not covered by their insurance until it is too late.
“But also, many people are actually ineligible to claim, which is a classic case of the mis-selling of payment protection insurance which has been in the headlines recently.”
While the payment protection insurance
industry has faced some very hash criticism over the last year or so, sold correctly, it is an invaluable product. How payment protection insurance works is that meets your debt repayments up to a set limit should you become unable to work due to unforeseen circumstances in the form of a monthly tax-free lump payment.
However, because banks and lenders have put huge profit margins on the product – the industry is thought to bring in around £5bn annually in profits alone – they focus more on pushing the product on customers rather than actually focusing on whether it is actually suitable for them.
Simon reinforces what Which? has said and urges customers to check and double check the small print for any exclusions as well as to check that they are actually eligible to be covered, before signing on the dotted line.
