Mortgage cover horror story: Please read.

chloecat_2

Sorry in advance to the modds if this is in the wrong thread and has to be moved:o

In early 2006 me and my BH remortgaged through a local broker. I was working full time and my husband was self employed which caused a few hold ups with offers due to proving income.

It took around 6 months to remortgage in the end and by that time we were so fed up we just wanted it all done and dusted and signed the forms.
We had done this for 3 mortgage offers, all with the relevent insurances added and the first 2 offers had fallen through so when the third appeared to be accepted we were overjoyed and thought no more about it.
As far as we were concernec we had our new mortgage (£250 cheaper per month than the previous one) and we were covered.

Bet you can see where this is going...

2 months later i began to have some medical problems and long story short got diagnosed with a critical illness. Our previous mortgage had critical illness cover with Norwich Union and my CI diagnosis would have meant that had we not remortgaged our mortgage would have been paid off on the spot. No ifs or buts, we would have been mortgage free.

I dug around in the enormous folder which housed all our new mortgage bumph, looking for the insurance policy. After finding it i rang the customer service number to explain what had happened and give over our details. I couldn't find our customer number but wasn't worried as they can find all that from your address and DOB. Nice lady on the phone was very sorry but there was no record of insurance being taken out with them for us.

It goes without saying that i was slightly bothered by this and after getting hold of our broker i was informed that he had made it quite clear to us that the figure we were quoted did not include mortgage cover. I argued for a bit then got upset and slammed the phone down.

The next hour was spent sat on the floor looking at all the paperwork and indeed we had signed for repayments with no cover whatsoever.

The moral of this horror story is Always double check your cover because you never know what is around the corner.

We still have no cover. Hubby is still self employed and i no longer work due to my health. My broker is no longer with the company, seems we weren't the only ones a little shocked to discover we hadn't got insurance.
I don't know what cover we should have or what we could even now get. I do know that if i had used even half my brain 3 years ago our life would be very different now. All of you please check before the week is out that you are covered and perhaps some good will come out of this.

Chloecat xxx

GGGG

Hi Chloecat,

Sorry to hear of your situation, but you probably have some redress-

Notwithstanding that the adviser has since left the company who arranged your mortgage, both they & he cannot absolve themselves of responsibility.
They have a duty to maintain client records for several years; I would write & ask that they provide you with a copy of your Client File, which should include a FactFind detailing your circumstances at the time of the interview.
The CI cover you had in place would not have been "attached" to your mortgage, but a stand-alone contract; you need to establish the circumstances that led to it being discontinued, & whether this was as a result of your adviser's recommendations. It seems odd that you cancelled a perfectly decent policy for no apparent reason... perhaps the adviser was in the process of replacing it with similar/better cover at lower cost?
Allow this company a reasonable opportunity to respond; if they are not forthcoming, escalate it to a complaint to the Financial Ombudsman.

Hope this helps...

dunstonh

Sorry to hear of your situation but there are a few things in there which are not consistent and it would be good if you clarify them.

2 months later i began to have some medical problems and long story short got diagnosed with a critical illness. Our previous mortgage had critical illness cover with Norwich Union and my CI diagnosis would have meant that had we not remortgaged our mortgage would have been paid off on the spot. No ifs or buts, we would have been mortgage free.

The Life and CI cover is independent from the mortgage. Remortgaging does not require you to change the insurance/assurance.

It would show as a seperate direct debit on the statement.

So, why did you have insurance at one point and not at the next? At what point did it stop and who told you it was linked to the mortgage?

The mortgage brokers and advisers here will know what I am trying to ascertain and where its leading to but before any snap judgement is made, its worth finding out a few more facts from you. Especially as the answers you give may give you an avenue for redress.

chloecat_2

Same answer applies to you both and it is this: me and my other half were so hell bent on swapping over to new mortgage that we incorrectly assumed the insurances tied together with the mortgage. This was before i was a MSE member and neither of us had a clue about financial matters.

Our first mortgage was part repayment with an endowment. When we took it out we also took out buildings and contents ins which we had never had before, critical illness, mortgage payment protection & life insurance.

Through my husbands self employed status we had ended up with another critical illness policy and another life insurance policy that the bank he held his business account with had recomended he take out, both of which turned out to be just for him.

Due to our inexperience, age and stupidity over the years we had over 21 direct debits coming out, more than half of which we didn't know what they were for.

Around the time of the ongoing remortgage we had hit a terrible financial patch and were trying to get rid of as many unnecesary DDs as possible and that is how all the previous covers ended up getting cancelled, by us not by our broker.

The old companies were blamless and as much as we wish to kid ourselves otherwise so was the broker.

I posted my little tale as a warning to others to be brighter than i was and to check all was well, not assume as i did. I was changing jobs while it was all happening and my mind was on other matters but sadly that slip cost me dearly. Hope this clears matters up.

No one can be blamed except myself for being too preoccupied to check the small print.

dunstonh

Thanks for the clarification. Unfortunatly, it does appear that there is nothing that can be done. Insurance companies do allow a small window to reinstate (to cover things like cancelled direct debit mandates in error) but not too long.

If the transaction had been advised, then you would have comeback. As it was DIY then you have none.

This site often focuses on getting things done as cheap as possible and getting rid of the adviser to save money. However, your scenario highlights the cost of doing it yourself and getting it wrong.

I hope things improve for you in the future.

Conrad

dunstonh wrote: »

This site often focuses on getting things done as cheap as possible and getting rid of the adviser to save money. However, your scenario highlights the cost of doing it yourself and getting it wrong.

Here, here!

How many times to we posts asking for contact details of fees free brokers.
Customers expect thier own wages and employer benefits to be decent, but at the same time they want others to work for as little as possible, and get a good service into the bargain.

Furthermore, for something to be cheap, someone somewhere has to pay, be it an Indian child labourer or a down at heal builder.

I truly think society would be improved were we all to recognise it's worth paying someone properly if you expect a decent service.


To the OP, I wish you well, and think you highlight a valuable lesson to others, which, is never assume anything.

chloecat_2

Thank you all. It is a hard lesson to learn but i will never be so stupid again.
Best wishes to you all
Chloecat x

toonfish

Good luck to you and respect for not attempting to blame somebody else.

The multitude of direct debits is a situation we often come across whereby folk have been sold policies that duplicate each other, and sometimes would even cancel each other out.