November 17, 2006

Homes at risk of MPPI probe

mortgage protection insurance uk

According to the Council of Mortgage Lenders (CML) home owners risk losing their homes if the Office of Fair Trading (OFT) does refer mortgage payment protection insurance to the Competition Commission (CC)

They have warned that mortgage borrowers may be deterred from taking out the insurance as a result of the proposed CC referral.

Mortgage payment protection insurance (MPPI) is a policy that will meet your mortgage repayments (and other mortgage related costs such as household insurance) should you become unable to work due to redundancy, accident or sickness.

The whole protection market (in particular income payment protection insurance and loan protection insurance) has come under close scrutiny by both the OFT, the Financial Services Authority (FSA) and the media as rip-off pricing and mis-selling have come to the fore.

Of all the protection policies, MPPI seems to come off the best and the general industry consensus was that it would not be investigated by the CC, though the other protection areas would.

However, it now looks likely that it will be referred to the CC, which could see a decline in sales. MPPI plays an important role in making home ownership more sustainable. Furthermore, according to the CML, weaknesses that exist in the PPI sector as a whole are not relevant to MPPI policies.

As an example, successful MPPI claims stand at 89%. Plus, research shows that when choosing MPPI, consumers do tend to shop around first.

Simon Burgess from protection specialist and industry expert is worried that home owners are being deterred from taking out MPPI policies. “They may be at greater risk of losing their homes, which is bad news all round”. He adds that MPPI is a way of help ensuring sustainable home ownership remains in all market conditions.

For low cost MPPI, visit BritishInsurance.com.

Filed under British Insurance, Mortgage Protection Insurance UK by

Leave a Comment

You must be logged in to post a comment.

Permalink Print Comment
British Insurance, PO Box 6164, Braintree, CM77 7ZW Subscribe to British Insurance Ltd by Email