Indemnity Insurance

bob_brookes

Hello out there!
This is my first time using any sort if forum etc and I'm hoping that someone can inform me about my particular story.
I took out a mortgage way back in 1983 it was a low cost endowment mortgage with a high street building society. Now at that time I was told that I was unable to have the mortgage unless I purchased an indemnity insurance policy to cover part of the loan. I did this as requested and the price of the policy was added to the loan and I duly started to pay my monthly payments for over 21 years until I moved to another provider. My questions are these:-
1/. Should the said building society have been obliged to tell me that they had better products for me to use and thereby save me money, and informed me of the newer deals to change to after a few years, instead of leaving me on the higher rates of interest for 21 years?
2/. Does the indemnity insurance policy that I had to buy in order to get the mortgage not constitute a form of PPI in todays world?
I would be very interested to hear peoples views on these questions, many thanks Bob

magpiecottage

bob_brookes wrote: »

I was told that I was unable to have the mortgage unless I purchased an indemnity insurance policy to cover part of the loan. I did this as requested and the price of the policy was added to the loan and I duly started to pay my monthly payments for over 21 years until I moved to another provider.

That is because you took out more than 75% or 80% of the purchase price or value of the property. To protect itself (and ultimately its depositors against you defaulting and it not being able to sell the property for enough to recover the loan and all the costs it incurred in doing so, it took out an insurance policy. Since it was doing you the favour by lending above its usual limit, you had to pay the premium - but it was the lender's contract with the insurer, not yours.

1/. Should the said building society have been obliged to tell me that they had better products for me to use and thereby save me money

No - because it was not your policy and it was also negotiated between lenders and insurers on a block basis.

and informed me of the newer deals to change to after a few years

No - it was a one off policy.

2/. Does the indemnity insurance policy that I had to buy in order to get the mortgage not constitute a form of PPI in todays world?

No it is a completely different product taken out to meet a completely different need.

I would be very interested to hear peoples views on these questions

People can have whatever views they like but what I have said is the reality.

bob_brookes

Thank you for taking the time out to explain this to me. I just wish that someone would have done it a long time ago and maybe I should have enquired sooner than this, but thank you again and all the best for 2012. Cheers Bob