Insurance

Campaign For Change > Advice Line > Insurance

I have a loan with the bank and I was persuaded to take out payment protection insurance when I first took out the loan. I have read in the press that these schemes may have been mis-sold. How do I know if this applies to me and what should I do?

Citizens Advice have made a 'super complaint' about the selling of these insurance policies. Often people are given the impression that the granting of a loan is contingent on taking the payment protection insurance (PPI) alongside. However these policies are sold completely inappropriately to people who will never be able to claim on them should they run into difficulties repaying their loans.

Typically, these groups would be those who will reach retirement age during the life of the policy, the self-employed, those who work part-time, those who are dismissed, those who have been made redundant under certain circumstances ie. there were reasonable grounds to assume that someone's job was under threat at the time the policy was taken out. This is not an exhaustive list of the groups that could be excluded.

The problems with these policies is that no questions about personal circumstances are asked at the time. The first you will know that you cannot make a claim is when you try.

Certain medical conditions are not covered and previous medical history is taken into account, but again these questions are rarely asked before cover is taken out and paid for.

If you find yourself in a situation where you were never covered in the first place, your premiums should be refunded.

Seek advice from North East Derbyshire Citizens Advice Bureau if you feel you have been mis-sold insurance.

My son uses a Go-Ped. Does he have to have insurance?

A person who uses a vehicle (which includes Go-Peds) on a public road or other public place must be insured for accidents involving her/his vehicle which cause damage to another persons property or injuries to other peoples. This insurance cover must at least be at the minimum level of third party insurance.

Incidentally he will also need a licence to drive a Go-Ped.

I have recently made a claim on my household insurance but the company refused to meet my claim in full. I am a bit confused about why this happened.

There are a number of reasons for this to happen.

  1. You could be under insured. In these circumstances you would receive a proportion of your claim which reflects the amount you are under insured by. For example if your contents are worth £20,000 but you are insured for £10,000, then only 50% of any claim will be met.

    Be aware however that some policies will pay nothing if you are under insured. You should therefore regularly check that your insurance reflects the current value of your belongings.
  2. The claim has been adjusted to take into account wear and tear.

    It is a general principle of insurance that a claimant should be left in the same position after the claim as she/he was before the loss. Therefore the insurer will either pay the cost of necessary repairs to the insured item or the cost of a new replacement less the amount if has depreciated due to wear and tear.
  3. There is a limit in the policy as to the amount payable for any one item.
  4. There is an excess on the policy, for example the first £50 of a claim.

Last updated: February 22, 2007