Hardly a day goes by without Payment Protection Insurance (PPI) and the way it’s been sold appearing in the news. Today, the Financial Ombudsman (FOS) has accused loan insurance providers of using “vague” clauses to needlessly reject claims from policy-holders who have become unemployed in the credit crunch.
One of the top 10 reasons for a PPI providers rejecting a claim is that the borrower was: “aware of any increase in the risk of unemployment” and didn’t declare it. This is the typical excuse that unscrupulous insurers use to avoid paying out.
PPI providers will defend this clause claiming it’s there to protect themselves against customers who bought cover whilst knowing they were up for redundancy. However we all know this is just more evidence that Payment Protection Insurance is useless in the vast majority of cases.
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