Egg (now YBS) Mortgage Payment Protection ceasing June 12 - Help appreciated.

kar999

Apologies in advance for the long post... and thanks in advance for any help/guidance.

We remortgaged with Egg in July 2002 and were sold over the phone an Egg Mortgage Payment Protection Policy for accident, sickness and unemployment to cover the mortgage. Mrs Kar was not working at the time (though now self employed) and I was fully employed (with a six month notice period) and entitled to full pay for sickness for six months so the policy was not really appropriate at the time.

I was made redundant two years ago and did claim on the policy. I have only been able to claim for a very brief period of approx 1 month as I have been getting temporary contracts and only ever once been claiming JSA for more than 30 days (which is a criteria of the policy). This was despite periods out of work in-between of less than 30 days for which I could not claim.

In the last two years Mrs Kar also made two claims for sickness for approx. 3 months each as she was initially hospitalised for 5 weeks in intensive care as a result of a botched up NHS operation which then required major corrective surgery 12 months later (Nov 2011).

As EGG mortgages and savings have now been sold to Yorkshire Building Society, last week we received a letter saying the Mortgage Payment protection policies did not form part of the transfer to YBS and they were giving 90 days notice that the policies would lapse and cover cease on 30 June 2012. They suggested we contact YBS’s preferred insurer Cardiff Pinnacle or an IFA or www.moneyadviceservice.org,uk

I contacted Cardiff pinnacle and they said I was ineligible for cover as I am not currently in permanent work but on a temporary contract until Oct 12 and Mrs Kar was not covered for her pre-existing medical issues and would have to wait 24 months to become eligible.

I can fully understand Cardiff’s conditions but we are now faced with being unable to obtain cover. I am very tempted to pursue Egg for mis-selling back in 2002.

I would appreciate any advice in regard to making a mis-selling claim particularly given that we have made claims on the policy.

Many thanks in advance.

dunstonh

I am very tempted to pursue Egg for mis-selling back in 2002.

Why? Mis-sale doesnt relate to now. It relates to then. The fact you still want it indicates it wasnt a mis-sale.

I would appreciate any advice in regard to making a mis-selling claim particularly given that we have made claims on the policy.

You need a complaint reason and you dont appear to have much going.
1 - you have had successful claims showing it would pay out
2 - it is set up as monthly premium (as it should be)
3 - you want it.

Is this just an attempt to join the compo chasing vultures or do you have a genuine complaint to make?

kar999

dunstonh wrote: »

Why? Mis-sale doesnt relate to now. It relates to then.

Fair point. But it was inappropriate when originally sold as, given our cirumstances at that time, the policy was not suitable as it would never have paid out for Mrs Kar and I was only covered for 50% of the payout period because of my employment T&C's.

Is this just an attempt to join the compo chasing vultures or do you have a genuine complaint to make?

I'm not really if favour of a compo culture but surely the test for miselling is it's appropriateness at the point of sale and the payment of inappropriate premiums for years afterwards.

My circumstances have subsequently changed somewhat (I had to work my six months notice period prior to my redundancy) but because I have to be claiming JSA for 30 continuos days I could be out of work for 11 months of the year and the policy would still not pay out unless the gap between temporary jobs is longer than 30 days.

Seeking work to minimise my losses actively helps the insurance company to avoid paying out.

Surely that makes the deck stacked heavily in favour of the insurance company both originally and even now, despite my small claim.

dunstonh

the policy was not suitable as it would never have paid out for Mrs Kar

You posted that they did pay out on two claims for her.

kar999

Yes. She became self employed in 2008, working from home with a small income, and in 2010/11 claimed twice, though it was for one medical condition (two prolonged related stays in hopsital). There were 30 day waiting periods for both claims so the claims were only small amounts.

At the time the mortage repayment policy was sold to us in 2002, and for following six years, she was a "housewife" & the policy was wholly unsuitable for her as it would never have paid out.

roonaldo

the total amounts both of you claimed on the policy would be deducted of any redressed owed to you if it was found to be mis-sold.

kar999

Thanks. Its a few hundred claimed against a few thousand paid
.

dunstonh

At the end of the day, the lenders are a bit scattergun in how they would handle a complaint. So, we cannot call it with confidence.

You have the potential for compliant on the MPPI but not the rest. However, depending on the documentation, we cant tell the response. The complaint is weak and if their documentation audit trail is good (as it should be) then they could probably reject it. We dont know what their documentation audit trail is.

We have highlighted some of the issues you have and you need to remember that this is MPPI and not loan/credit card PPI which is where the real PPI issues are. So, if you intend to go with a complaint, don't be surprised if they say no. However, dont waste your time on the "too many insurances" approach as would effectively be complaining that he did his job correctly.

kar999

Thanks. If I do go ahead it will be due to the issues at point of sale. I have original documentation and will dig it out but clearly I now realise I was paying significant sums for something that Mrs Kar wasn't covered for at all and I was already 50% covered for by my employer. The premiums then were quite high as it was for a full remortgage from an interest only to an offset repayment.

We paid a large lump sum off a few years ago which reduced the mortgage and premiums significantly. Mrs Kar's last sickness claim only resulted in a payout of just over £90 after the 30 day excess waiting period.

I appreciate my current employment position is somewhat irrelevant but the criteria of having to claim JSA for 30 continuous days even in between taking temporary work is a nice little cop-out for the insurer. Taking that point further, it's little wonder people stay on benefits and claims rather than seek work.

If I do claim and it's rejected, so be it, but the benefit of hindsight is a wonderful thing.

On a more general point anyone with Egg MPPI should note it ceases on 30 June 2012.