PPI Claims and Mis-selling

Payment protection insurance, or PPI, is a kind of insurance that promises security in case of some unfortunate event that may happen in your life. This is a credit-related insurance that gives protection when death occurs, or when you are affected by a redundancy program that is to be implemented by your employer, or when you suffer from disabilities brought about by sickness or accident.

When those things happen, payment protection insurance will cover your outstanding financial commitments resulting from personal loans, auto loan, mortgages, leasing obligations, or the use of your credit card. It will take over your duty of paying your monthly installments. However, keep in mind that this kind of insurance is full of exclusions and exceptions. Make sure that you are qualified for this kind of coverage to avoid wasting your funds.

When you are taking out those kinds of obligations, be aware that you are not required to purchase a payment protection insurance policy. Many do not know that they have this coverage because they do not inquire upon the details in the contract of loan or mortgage that they are taking out. Most of the time, the lenders include PPI in the obligation without obtaining first the consent of the debtor. Or even if they do, they do not explain fully the details of the PPI, hence more and more are buying this kind of insurance without really understanding its implications. What is worse is that they do not know whether or not it is necessary for them to purchase PPI. This is often referred to as missold payment protection insurance.

If you have been missold a payment protection insurance policy, there is a good chance that you can be entitled to pursue ppi claims. About sixty percent of the existing PPI policies are considered as missold PPI. You may be one of them, thus it is advisable to review your contracts of loan or mortgage.

These are the common misselling strategies that are used in PPI:

  • Making the impression that payment protection insurance is mandatory. The truth is, it is not. It is optional and it is up to you if you want to avail of it. If you think that you need this protection and you want it, it is better to get it from other insurance providers. Purchasing it from the lender will cost you more because it will be included in your loan obligation. That means that the payment for the PPI policy will also be earning interests.
  • They do not tell you that the payment protection insurance has been added to the loan. You will not even know that you are paying for it. They use this tactic to avoid inquiries that may lead to the situation where you will be refusing to buy it from them. It is then wise to review your loan contracts before signing them.
  • They do not check your medical history. This will leave your insurance coverage useless because in this kind of insurance policy, existing conditions are, more often than not, not covered. Be aware of the exclusions and exceptions indicated in the insurance policy in case you are purchasing one because every policy is full of these.
  • They do not check your employment status. This may also render your PPI coverage worthless. In case of redundancy, knowledge of any possibility of being affected by the program to be implemented will exclude you from the coverage of the PPI. Look for all these in your policy and make sure that you are making a worthy buy.