About PPI

What is Payment Protection Insurance?
Payment Protection Insurance (PPI) is frequently sold alongside credit agreements and is meant to protect a borrower against the risk of being unable to make repayments in the event of circumstances such as accident, sickness or unemployment.

This is the basis of its sale to you and often the lender insisted that it was taken out. This has now been ruled as bad practice and very unfair to customers by the Government and the Office of Fair Trading.

If you've taken out a mortgage, for a UK or overseas property, a loan for a kitchen or a car, applied for a credit card, consolidated your debts or some other loan, payment protection insurance will almost certainly have been offered. PPI can work in some cases but government figures suggest this is a small minority. Statistics say only 4% of people ever claim on PPI policies and that one quarter of these claims is refused. Small print and difficult administration ensures this low payout rate.

When you take out a loan (secured or unsecured), credit or store card, you're often encouraged to take out Payment Protection Insurance (PPI) at the same time.

Selling PPI is very lucrative for the banks, with some 20 million policies already in force and annual gross premiums of over £5 billion.

Many policyholders find that, if they need to try and claim, they cannot make a successful claim on their policy because of numerous exclusion clauses and administrative hurdles.

Worse still, the policies are very expensive – premiums for PPI policies can add anything from 13% to 56% (CAB research) or more to the total amount to be repaid!

In many cases borrowers don't even realize they have PPI – some lenders just add it to a policy anyway and it's cost disappears into the monthly repayment schedule.

If you have a secured or unsecured loan, there's a 60-70% chance you will have PPI. And with the Ombudsman stating that 85% of all claims are paid out on, it makes sense to act.

You have nothing to lose, and a great deal to gain.

More information about PPI

Payment Protection Insurance (PPI) Mis-sold PPI?
Payment Protection Insurance (PPI) What is PPI?
Payment Protection Insurance (PPI) Problems with PPI
Payment Protection Insurance information
PPI court case – what it means for you