Mortgage insurance

zaksmum

The insurance on a mortgage agreement says it will pay out to cover mortgage repayments in the event of a claimant becoming unemployed through no fault of their own.

They refused to pay out when the claimant was made redundant. Does redundancy not count as becoming unemployed through no fault of their own? Redundancy was not specifically excluded.

opinions4u

Voluntary redundancy is usually excluded. As is redundancy on enhanced terms.

Any period of payment in lieu of notice is usually excluded.

The first 30-90 days of unemployment is usually excluded.

Termination due to misconduct is usually excluded.

Some policies also require a certain level of national insurance to have been paid, triggering a successful JSA claim.

ACG

I had a query about this with one of the insurance companies i use...

If it is voluntary then they do not pay out, but if the only option is to take a lower paid job then the company i use would pay out. Without knowing more its difficult to say.

But if you took voluntarily redundancy then it makes sense that they wouldnt pay out as it was an option.

zaksmum

The redundancy was totally involuntary. The company suddenly went into administration and all staff were immediately and unexpectedly made redundant.

ACG

What reason have they given for not paying?
If you have had the policy for 2 weeks then some companies do have a waiting period before they will pay out.

If your not happy with their response, make a complaint and if your still not happy refer it on to the Financial ombudsman.

dunstonh

The insurer should state why you do not qualify. We need to know what that reason is

How long have you had the insurance policy?

zaksmum

They said redundancy is not covered. They have been asked to provide a copy of the policy document itself as it's been mislaid, but there's nothing in the summary about excluding redundancy.

dunstonh

zaksmum wrote: »

They said redundancy is not covered. They have been asked to provide a copy of the policy document itself as it's been mislaid, but there's nothing in the summary about excluding redundancy.

Are you claiming on the right policy?

What does this policy cover you for? life assurance for example?

zaksmum

I'm asking for a friend. The policy was just to cover the repayments if she became unable to do so and one of the aspects covered was becoming unemployed through no fault of your own.

When she was made redundant she attempted to claim under the policy, but was told redundancy was not covered.

She has the letter confirming the loan and the PPI with it, but not the actual policy document.

The letter stipulates that she must note that if she cancels the PPI the entire loan (partial remortage) is immediately repayable.

It adds that she is covered for inability to make repayments in the event of illness, accident and becoming unemployed through no fault of her own.

dunstonh

I'm asking for a friend. The policy was just to cover the repayments if she became unable to do so and one of the aspects covered was becoming unemployed through no fault of your own.

You say that but the insurer says different. So, if the insurance doesnt cover redundancy, what does it cover?