Bristol & West’s accident, sickness and unemployment policy attacked as ‘inexcusable’ as policy holder loses out
MORTGAGE STRATEGY - 8TH OCTOBER 2002
Bristol & West has been accused of tying borrowers to ‘inexcusable’ non-transferable accident, sickness and unemployment policies.
B & W’s policy of linking insurance coverage to mortgage products is accused of preventing borrowers of moving to other lenders that offer cheaper mortgage products.
Brian Humphreys, managing direct of Weston Super Mar based 1 to 1 Mortgages, wrote to Mortgage Strategy explaining how he discovered his client could lose their accident, sickness and unemployment policy and £6,000 in cover - if they moved to another lender.
Simon Burgess, managing director of insurance broker Burgesses says; Lender-based insurance packages are a major failing and ought to be addressed –it’s inexcusable. I can understand why they do it, because from a risk management perspective they don’t want people to move. It ties people in. They may have a composite policy for life and critical illness but in my opinion Bristol & west have some of the worst accident, sickness and unemployment policies
on the market. It’s an appalling policy and extremely expensive. The moral of the story is buy your mortgage payment protection insurance from an intermediary and not from the bank”.
Burgess also claimed that the same problem faces a large number of borrowers in the UK, suggesting that 95% of all insurance policies were tied in with the original lender’s mortgage.
British & West’s, Mike Gutsell defended his company’s policies, explaining that their product manager had not received a complain on a Bristol & West policy in three years and that they had received no official complaint from Humphreys.
He says: “We do something slightly different to other providers in the market. We make a charge based on the size of the mortgage so it’s inextricably linked to the loan.
For premium of 50p per £1,000 if you do become unemployed, you don’t just get a proportion of the mortgage paid – you get all of the mortgage paid and £150 each month. It’s slightly different policy but because it is linked to the size of the loan, once the loan ends then you will need to start a new policy.”
