Jump to content
House Price Crash Forum
Sign in to follow this  
cashinmattress

Insurer Hikes Cost Of Protecting Home Loans

Recommended Posts

Insurer hikes cost of protecting home loans

Legal & General has become the latest big-name insurer to raise the cost of insurance that covers mortgage repayments in case borrowers lose their jobs.

The move, which comes as arrears and repossessions are rising rapidly, has provoked outrage because it applies to existing as well as new customers.

L&G has about 50,000 customers who have taken out mortgage-payment- protection insurance. MPPI covers your repayments for up to a year in the event of job loss, illness or accident.

The insurer has lifted the cost of cover by up to 39% for all customers. So, on a £200,000 loan with repayments at 4%, or £1,055, premiums will rise from £44 to £61, taking the total cost from £1,099 to £1,116 a month. The average premium will increase by about 20%, L&G said.

Earlier this year, Pinnacle and Hitachi raised the cost of insurance by 40%, while Norwich Union increased premiums by 30% in January and Paymentshield raised them by 20%.

Melanie Bien of Savills Private Finance, a broker, said: “Someone who has been paying in for years should not be penalised and treated the same as a new customer.â€

MPPI claims soared 200% last year, said the Association of British Insurers.

Hmmm. The pot will run dry, if it hasn't already.

Share this post


Link to post
Share on other sites

I suspect that this has as much to do with a correction in the pricing of risk and the structural fall in the profitability of the insurance business as the likelihood of increased unemployment.

Then again, I don't think any of those three factors are fully priced in.

If you need to protect yourself through insurance of any type, I'd do it now.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   325 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.