While the exclusions can differ and you should compare them along with the quotes, there are some common ones. Being retired, self-employed, suffering an ongoing illness or only being in part time work could mean that you would be ineligible to make a claim against the UK mortgage insurance policy. It is the exclusions which were behind the majority of mis-selling when in 2005 the Financial Services Authority began investigating the sector. As a result several well known names on the high street were given fines and then the sector was referred to the Competition Commission by the Office of Fair Trading.
While changes for the better have been made, the Competition Commission announced in late 2007 that high street lenders are still charging high premiums for UK mortgage insurance and loan payment insurance, and raking in up to 80% in profits. Along with this one of the latest firms to receive a fine was a mortgage lender. Not only did the company receive a fine but the Financial Services Authority handed out a personal fine to the Chief Executive. The Financial Services Authority say they will continue to crack down on firms who are mis-selling mortgage protection and loan protection so more Chief Executives should be prepared to put their hands in their pockets.
One of the biggest changes that will go towards making payment protection more transparent for the consumer is the introduction of comparison tables in March 2008; a series of questions will help lead the consumer to choose the right protection policy. Along with this they will highlight the exclusions which can be found in all payment protection policies and make the consumer aware of how much the cover will cost in total. All of these have caused severe problems in the payment protection sector with very little advice being given on policies and what is given being filled with technical jargon which the consumer does not understand.
Buying UK mortgage insurance from an independent specialist provider will get you the cheapest premiums and the best advice and access to the key facts. The advice comes in easy to understand plain English, cover can begin to payout from between the 31st and 90th day depending on the provider and would then continue for between 12 and 24 months again depending on providers so you must read the terms and conditions.
UK mortgage insurance may be surrounded by controversy but providing it is suitable for your circumstances it can make the difference between losing the roof over your head and keeping it and of course it gives you peace of mind so you are able to recover from illness or find another job if you are made redundant. The State cannot be relied upon to give you the money needed each month to meet your mortgage repayments which has left many facing repossession through not having a back-up plan.
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of uk mortgage insurance, loan protection insurance and income protection insurance.
