Repossession Figures Highlight PPI Need
It has been revealed that The Building Societies Association (BSA) showed that just 16 per cent of people who were subject to house repossession had insurance against payments. This demonstrates that the vast majority of this sector are extremely vunerable to home loss whilst the media continues to pay attention to the misselling of PPI
Mortgage PPI can be vital for some, and in the event that they lose their jobs and cannot make loan repayments, insurance can provide the vital funds necessary to keep a roof over their head. However, the misselling scandal has put a negative tint on the industry, making many consumers wary of the protection products.
In the 1990s, mortgage PPI was actively promoted as Britain saw an increasing number of individuals taking to the property ladder. As state benefits continue to reduce, PPI has become more important to consumers to protect their homes from repossession. However, the take-up of the insurance product has not been as high as the BSA would like, with their report calling for the government and industry to take action and ensure that homeowners have legitimate insurance to offer support should they need it.
British Insurance has revealed that Payment Protection Insurance (PPI) has an important place in society and needs to be rehabilitated so that consumers feel safe to use policies. Although PPI has been missold to millions of consumers, the right PPI product remains the best way for families and individuals to protect their assets in situations of loss of employment or illness.
Individuals who lose their employment or become ill and can no longer work are reliant upon a PPI claim. In such cases, they can make significant monetary claims; funds that can help pay mortgage or credit card repayments and ensure that individuals can stay financially afloat through difficult times.
With the Office for National Statistics revealing that unemployment had grown to a July high of 2.51 million, more people than ever could be at risk of losing their jobs. However, 86 per cent of British workers are without PPI, leaving them very vulnerable should their income be slashed or lost.
British Insurance’s Nel Mooy revealed that PPI is still confusing for many people, with the recent misselling scandal affecting many residents’ view of such products. Miss Mooy said, “Plain-speaking information, explaining what PPI is, how it works, who it’s suitable for and what it costs, is hard to come by.” With the group developing an easy to understand guide in association with MoneyNet, it is hoped that consumers will be become more open to the insurance product, and protect against possible financially difficult futures.
In particular, the BSA is asking that brokers take the time to explain the differences between mortgage PPI and more general PPI products, allowing consumers to take out a specific product that will cover their home and not double up currently held policies. Moreover, whilst the misselling scandal continues, protection of homes should be a priority.