Loan Insurance Claims
At some time or another in our lives most of us will take out some kind of loan or personal borrowing. If you have taken out a loan in the last 10 years then it is likely you were offered some form of loan insurance cover. For many years loan insurance was extremely popular and was sold extensively across the lending world. It claimed to protect the borrower from financial hardship by stepping in to cover repayments in the event of involuntary unemployment. In reality loan insurance was often expensive, represented poor value for money and was frequently mis-sold. Following several high profile investigations the public became aware of these issues and there was a huge surge in loan insurance claims.
The cost of loan insurance can vary, but often costs between 13% and 25% of the core loan value. On a £25,000 personal loan you may, therefore, expect to pay between £3,250 and £6,250. This sum is usually added to the overall loan, significantly increasing debt and incurring interest. Despite the costs, some people feel that loan insurance is a worthwhile cover. A 2008 Competition Commission survey called into question the level of value represented by this type of insurance, though, when it was revealed that as little as 15% of people who tried to use their loan insurance were successful in doing so.
Many people who make loan insurance claims choose to do so because they believe their lender failed to explain the costs or terms and conditions of the cover to them. You may also be entitled to make a claim for mis-selling if you were pressured into taking out the cover or you were sold a policy that proved to be unsuitable for your needs. If you would like assistance making your loan insurance claims, we could help. To get started simply complete our claim form and we will send you out a pack with everything you need to get started.