Property Insurance as part of Mortgage offer

hogsta_2

Firstly, as its my first post, I`d would like to thank all those who have posted on this forum as I have been looking around for quite sometime and found many items of interest and help.

However, I have not come across this particular scenario: Many moons ago when I was young and naive I took out a mortgage with the Alliance & Leicester which included in the offer of advance their property insurance premium. I accepted the offer and I continued this payment for some years until I found a better insurance deal and cancelled the one with Alliance and Leicester. My question is this: Was the A&L acting legaly? and if not what am I entitled to claim by way of compensation?

Thanks in advance for any responses.

J_i_m

So effectively you basically took out your home insurance with your mortgage provider?

If that's the case, I'd doubt you have grounds to complain, unless they told you that you wouldn't get the mortgage without the insurance. So the question is, was it forced upon you and were you adequately advised?

hogsta_2

Thanks for your reply. Sorry I should have been clearer. Its the fact that the insurance premiums were added to the outstanding mortgage balance annually and then added to my monthly repayments that concern me. And that this was part of the Offer of Advance. At the time I assumed I needed to agree to this arrangement to get the mortgage.

roonaldo

that was normal for some lenders, it doesnt incur interest, is monthly paid and can be cancelled at anytime.
you took buildings insurance with the lender, nothing new and nothing wrong with that.

and also, having it on the mortgage offer is a good thing, its supposed to be, not having it on offer would be worse.

dunstonh

Was the A&L acting legaly?

yes

what am I entitled to claim by way of compensation?

nothing.

It is a mortgage requirement for you to have your buildings insured. Nowadays you can choose your insurer (although technically, the lender can insist on certain criteria and even refuse certain insurers from being used). In the 80s to mid 90s, the lender was allowed to insist on the insurance being with them. It wasnt really until around 1993 that people started buying their insurance away from the lenders.

How far back are you looking? Not that it matters though as you are not going to get anywhere with this.

hogsta_2

Thanks guys. Actually I was hoping everything was in order. 1. Because I dont like being conned and 2. It was a claims compensation rep who suggested that I might have a claim. I thought it unlikely and you have confirmed for me that he was talking BS. Many thanks

J_i_m

Don't even entertain those people for the time of the day, unless you want to entertain yourself by winding them up.

They'll say anything to remove money from you. And more often than not, far better advice is available for free.

dynoman

dunstonh wrote: »

yes



nothing.

It is a mortgage requirement for you to have your buildings insured. Nowadays you can choose your insurer (although technically, the lender can insist on certain criteria and even refuse certain insurers from being used). In the 80s to mid 90s, the lender was allowed to insist on the insurance being with them. It wasnt really until around 1993 that people started buying their insurance away from the lenders.

How far back are you looking? Not that it matters though as you are not going to get anywhere with this.

Sorry in advance, but i don't agree.

Back in 2000, I was advised that it was compulsory that i took Buildings insurance through my mortgage provider, Leeds Building Society as part of me getting the mortgage.
This being my first mortgage and being nieve, i took this as the norm.

Having just moved into a new property and switching mortgage companies, it has come to light that nothing is compulsory and this should never have been done.
They were charging me extortionate prices each year and adding this to my mortgage, incurring interest.
The thing is they never advised me that the insurance was ready for renewal, they just added it to my mortgage each year which would show up on my yearly statement stating, YOU NEED NOT DO ANYTHING, ALL IS TAKEN CARE OF. Something like that.
I have gone through the 8 week procedure with this and have passed this on to the FOS, who taken the case on.
Please, don't let the FAT CATS keep ripping us off.

dunstonh

Sorry in advance, but i don't agree.

You response doesnt tie in with my post in anyway. So, I cant see how you cannot agree.

I said that it stopped being compulsary with most lenders around 1993. You said you bought in 2001. Thats 8 years different.

As for your complaint, its a bit of hit and hope as its pre-regulation and you no doubt have no evidence to support your claims. So, you are effectively pinning your hope on something at their end that shows wrong doing. You may well have been mis-sold but saying you were and proving your were are two different things.

dynoman

dunstonh wrote: »

You response doesnt tie in with my post in anyway. So, I cant see how you cannot agree.

I said that it stopped being compulsary with most lenders around 1993. You said you bought in 2001. Thats 8 years different.

As for your complaint, its a bit of hit and hope as its pre-regulation and you no doubt have no evidence to support your claims. So, you are effectively pinning your hope on something at their end that shows wrong doing. You may well have been mis-sold but saying you were and proving your were are two different things.

Surely, just by them not informing me that the insurance was ready for renewal and adding it to my mortgage each year without my say so is enough.
I have got a letter from them regarding my complaint stating that it was compulsory for the first year but after that i could have canceled at any time and that i had been mis-informed about the insurance. However, the way they lay it out in the mortgage statements each year is very crafty. They give you the impression that it is still compulsory.
Regarding evidence, i have all the mortgage statements for each year.

dunstonh

Surely, just by them not informing me that the insurance was ready for renewal and adding it to my mortgage each year without my say so is enough.

No its not. Otherwise people could just make things up all the time and get away with it. In most areas you have to provide evidence to support your claims. In some areas the onus is on the firm to provide evidence to counter your claims but on something like this and going back so far, I cannot imagine they will just take your word for it.

However, the way they lay it out in the mortgage statements each year is very crafty. They give you the impression that it is still compulsory.
Regarding evidence, i have all the mortgage statements for each year.

If it says its compulsory to have their insurance on the statements then you have a case. If it says its compulsary to have insurance then you dont. If it doesnt say anything about being compulsary but you are interepreting it as such then it depends on how it is worded. The FOS will then consider that wording and your IQ (not joking there, ability to understand is considered) and make a decision.