Mortgage Indemnity

carrots88

Can anyone tell me what should happen if I paid out £600 for a mortgage indemnity for a second charge loan, but the loan was later bought by another company and the provider of the mortgage indemnity insurance declined cover. I know the mortgage indemnity does not cover me, it covers the lender, but what about the £600 I paid?

opinions4u

If the indemnity insurer paid out on cover they could still pursue you for their losses.

In the circumstances you describe, they won't pay out, so the lender will still be able to pursue you for the loss.

From a borrower's perspective it makes little difference. From a lender's perspective the make more losses. From the insurer's perspective - they're laughing at everybody.

(Well they're not really as those providing such cover have lost a fortune in recent years).

carrots88

but when I paid the £600, it was for indemnity for the life of the mortgage, and it did actually call it an indemnity then (in 1988) not just an extra charge. If the cover was only in place for less than half of the mortgage, shouldn't there be a refund of premiums to someone. When I asked the lenders, in writing, whether a claim had been made on the indemnity, they twice avoided answering my question and seemed reluctant to answer on the telephone too. I was not told of this at the time, so was wondering whether there was any reason why they might be reluctant to tell me this and whether I can use this to my advantage as they are now chasing me to repay the shortfall, even though I made a monthly instalment offer in 2000 which was ignored.

luckyfool

Why would there have been a claim on the indemnity cover? Was your property repossessed and was there a shortfall in repaying the mortgage lender(s)? If not then there was no claim.

Neither you, nor the lender are going to get a refund on the Mortgage Indemnity Guarantee Premium.