The great mortgage payment protection insurance cover scandal
- 17TH JULY 2007
Mortgage payment protection insurance cover has consistently been in the news over the last year as a result of the Financial Services Authority’s investigation into payment protection insurance and the ethical British Insurance’s findings that many homeowners are paying too much to protect their home.
British Insurance discovered that the cost of mortgage payment protection insurance cover actually added £10,000 more than necessary onto their mortgage if individuals chose to take the mortgage payment protection insurance cover with their mortgage provider. This experiment was conducted on the premise that the homeowners in question owed £100,000 on their home. This figure would of course rise if the debt were larger.
As a result, there are lessons to be learnt from the state of the mortgage payment protection insurance cover market at the moment. Independent payment protection provider British Insurance’s Simon Burgess has responded by urging homeowners to shop around before deciding on one particular policy.
Every provider will happily give homeowners a mortgage payment protection insurance cover quote, but it would then be up to the individual to compare the cover. Although the content of the majority of policies is roughly the same, with slight differences here and there, the cost of the policies often varies greatly and the consumer would be able to gauge just how much he or she should be paying for peace of mind.
After all, why pay more for mortgage payment protection insurance cover than is absolutely necessary?
