If you have purchased a property partly-funded by a mortgage in the last thirty years it is likely your mortgage broker, bank or building society offered you some kind of loan insurance. Loan insurance often known as Mortgage Payment Protection Insurance or simply PPI is a common financial product sold by most major lenders including Nationwide.
Designed to cover a borrower if they are unable to work for a period of time due to redundancy, accident or illness the Payment Protection seems to offer customers a financial safety net. For most people buying a home is the single biggest purchase of their lives and many are concerned that the loss of employment could leave them in financial hardship and with the threat of losing their home. For this reason most people consider taking out this type of cover, whether it was through Nationwide or any other lender, was essential. The insurance has been the subject of much media interest in the last few years after it emerged it had been widely mis-sold.
For some people payment protection insurance can be a valuable cover, but it is not suitable for everyone. Many policies have a high number of exemptions meaning there are quite strict criteria as to what can and cannot be covered – in many cases this extends to the circumstances of the borrower meaning not everyone qualifies for cover. One example of this is customers over the age of 65. In many cases insurance cannot be offered to people in this age category because they are perceived to be of a higher risk than younger borrowers. Due to a lack of staff training and a knowledge of the product many people over this age have been mis-sold this cover. This means you could be paying for payment protection insurance on your mortgage that you could never hope to use. An investigation by The Competition Commission found that just 28% of people who try to use their mortgage PPI policy are able to do so. This is often because the policy was unsuitable for the customer and should not have been sold, in some cases because of the customer’s age. The low rate of payouts is highlighted further when it is compared to car insurance. In the same survey The Competition Commission found that the pay out for car insurance is typically 78% - this means for every £1 spent on car insurance, insurance companies make £0.22 of profit compared with mortgage PPI which brings in £0.72 for every £1 spent.
Another common example of mis-selling concerns pre-existing health conditions. Most payment protection policies do not cover these. This means if you have an existing health condition and that condition worsens forcing you to take time off work it is unlikely your mortgage PPI policy would cover you.
For many people the dismay in having their claim for help from their mortgage payment protection insurance policy rejection is heightened when they learn just how expensive the cover really is. Because MPPI is usually added to the total cost of the mortgage, many people do not fully appreciate how much of their monthly payment purely covers the cost of their insurance. The cover can cost between 13% and 25% of the core mortgage value. On a £100,000 mortgage this could, potentially, add between £13,000 and £25,000 to your total debt. Mortgage payment protection also incurs interest at the same rate as the original borrowing.
If you believe you have been mis-sold a mortgage PPI policy by Nationwide or any other lender you may be able to make a claim. So far, we have helped more than 60,000 customers make a claim and recover over £50 million.
You can make a claim even if your mortgage is paid off and it will not affect your relationship with your bank or your credit rating. We aim to get a full refund of premiums paid for every customer plus 8% interest meaning you could really be owed thousands of pounds. Our biggest win to date was for more than £32,000 and we often resolve claims in less than eight weeks.
To start your PPI reclaim today or for more information about making a claim against Nationwide or any other bank, building society or broker call our claims team on 0207 471 2000.
Remember, you could also have been mis-sold payment protection insurance on a personal loan, hire purchase agreement, store or credit card. There is no limit to the number of claims you can make and our service operates on a No Win No Fee basis.*