In April, the media commented on insurers’ massive price increases for their Mortgage Payment Protection Insurance. (Guardian 14/04/2009). This trend continues unabated. They reported that Hitachi and Cardif-Pinnacle had increased their rates by 40%. They also joined Norwich Union, who in January 2009 imposed a 30% rate hike. With the Legal and General joining the bandwagon for rate increases, more insurers are jumping on board. With redundancy taking place across the country, it is not surprising that few people will cancel their policy. Many people will be relying on these policies for a roof over their heads for the first time in years. Everyone who bought this coverage is now obligated to pay a ransom to keep it.
Fortunately, not. There are still many insurers that offer low-cost coverage and are actively seeking business. They are mostly available online, and sell directly to the public. These are in stark contrast to the companies that keep increasing their rates. For recommendations on MPPI providers such as Money Saving Expert, check out online consumer websites. They did excellent research for Martin Lewis, a regular contributor to GMTV and Radio 2. Compare mortgage insurance prices on Money Supermarket, the most popular comparison site for this type. These can both be used to quickly find the best value providers.
Many people feel that it is difficult to change insurers. For existing MPPI policy holders, however, it is not uncommon to receive special exceptions. The insurance company will waive the normal 90- or 120-day unemployment exclusion period. A spokesperson from a low-cost provider confirmed this. Our company will match any existing coverage and we are happy to confirm that customers can switch to us for no additional cost. The customer is completely protected and there are no arrangements fees. We completely waive the normal exclusion period. We are very pleased to work with people who have been paying this insurance for many years. Anyone switching should save between 20-30% and more. Many people have more than half the cost of their insurance.
There are many great deals out there, but there is still the doubt that most people believe they can only get a policy through their mortgage lender. It is not true. It’s easy to switch to a different policy that offers the same benefits, and still save a lot of premium. The larger players have an interest in keeping as many of their existing businesses as possible. Look out for newer market players who realize the enormous potential of tapping into disenchanted people who are currently suffering huge hikes in their premiums for Mortgage Payment Protection insurance.
Existing holders of this insurance have seen unprecedented premium increases since 2009. The Sunday Times reported that Legal and General had increased the cost of its coverage by as much as 39%. L&G however maintained that the average increase was only 20%. According to reports, they have approximately 50,000 customers. This is quite a number of unhappy customers who might feel it is time to move on. The big insurance companies are having a private competition to see who can charge the most and get away with it. Their customers may have to cancel their coverage due to affordability, even though they are facing a worsening economy and job cuts. It is better to cancel than switch, as cancellation should not be an option. It is crucial to have the assurance that you have insurance in case of an emergency.
One big question remains unanswered by the cynical consumer: Do they switch to new coverage only to find that their old insurer raises their rates a few months later? It is difficult enough to get an underwriter to commit to future premiums during normal times. But it is nearly impossible to do so at a time when unemployment is high. Individual customers may be able to get confirmation about their policy. It’s worth asking. This is often because insurance agents will tell you that there are no price increases or that the systems they use are slow and expensive to modify. It could take up to a year before anything changes. This allows you to save money and then move on if needed.
Anyone who is faced with an increase in their Mortgage Payment Protection insurance premiums should look for other options. It is possible to switch. It is easy and free to do online. It’s easy to save money and avoid creating gaps in your coverage. It is important not to cancel an existing policy before the new one becomes effective.
Dennis Haggerty FCII M IDM Marketing Manager iprotectinsurance.co.uk
The focus on providing a product selection that is exclusively online has been key to the success and growth of iprotectinsurance. i:protect offers customers extraordinary value by eliminating all costs associated with selling insurance. This includes commissions, middlemen, commission, and telesales.