I appreciate that the firm is regulated by the Financial Services Authority and customers can still refer their complaints to the Financial Ombudsman Service and seek compensation from the Financial Services Compensation Scheme, but claims will end up being dealt with by a Danish insurer and this could further complicate matters, especially if there are queries or complaints about the claim.
Braintree, Essex (PRWEB) February 3, 2009
As the number of unemployment claims on Payment Protection Insurance continues to increase, PPI lobbyist Sara-Ann Burgess from specialist firm Burgesses warns people to check whether their payouts will come from UK insurers, before buying a policy.
The Association of British Insurers recently released statistics that showed unemployment claims rose to 19,105 in November 08 - a 118% increase on the previous year. And with more job losses announced daily, Sara-Ann is fearful that people will rush into purchasing cover from a provider that may not have the backing of a UK insurer, adding extra layers of bureaucracy should they need to claim.
Sara-Ann comments: "It's inevitable unemployment claims figures will rise this year, prompting even more people to have in place some kind of financial support package that replaces their income or pays their bills should they lose their job. However, I do worry that people who opt for PPI will either pay extortionate premiums for cover sourced from a High Street lender or turn to an independent provider who may not be affiliated with a UK insurer."
Sara-Ann has for years, lobbied consumers to purchase cover from independent sources, but is aware that some providers, such as Paymentcare, use a Danish insurer, Alpha Insurance A/S, to settle customers' mortgage and income protection claims.
She continues: "I appreciate that the firm is regulated by the Financial Services Authority and customers can still refer their complaints to the Financial Ombudsman Service and seek compensation from the Financial Services Compensation Scheme, but claims will end up being dealt with by a Danish insurer and this could further complicate matters, especially if there are queries or complaints about the claim."
In a bid to support the UK economy, consumers are being urged to buy local to support local businesses and Sara-Ann feels the same philosophy should be used when it comes to buying financial services products. "There's always been an appetite to 'buy British' and I don't see why it should be any different when it comes to insurance. Why use a Danish insurer when you can use British ones?
"We're witnessing a growing movement to support British workers and I want to add my voice when it comes to insurance. There can be many parties involved in insurance provision and consumers may find it hard to identify who their insurer is, especially as the details are often hidden in the policy small print. Insurance is the delivery of a promise and claims handling is the one time an insurer gets to deliver on its promise. I like to know who's going to be responsible for my payout and I urge others to check before they buy - there's no need to add a tier of complication."
Independent provider British Insurance has a UK insurer paying its claims and last year received a100% rating from financial specialists, Defaqto, for its mortgage payment protection insurance. The Company has a 100% customer retention rate, has never received a product or service complaint and offers policies for homeowners, those renting and people in shared ownership schemes.
Premiums are £3.40 per £100 of benefit for unemployment cover, so a person looking for a monthly replacement income of £500 would pay £17 per month.