Consequential loss as a result of failed PPI claim mis-sold policy

[Sunny-side-up]

Hello Caggers,

 

I’ll try and be as brief as possible…

 

After a long 4-year battle on a failed claim for a mis-sold PPI policy,

the insurance company agreed to pay a back dated claim.

 

 

I had a Mortgage Protection policy with the Halifax.

It was sold to me over the phone on the premise that my mortgage payments would be covered if I was ever to lose my income.

I accepted.

 

My initial claim was for them to pay my mortgage payments when I became unable to work.

They didn’t (it seems) record that I had made a claim back then

even though they have some information recorded on their system that I contacted them

and the medical staff that looked after me at the time contacted them.

 

 

They also have records that I contacted their legal department

to enquire about my employment situation when I became ill.

I know I started a claim – they don’t seem to agree.

 

Two years after my illness I was able to return to work

and have been in continued employment since then.

 

 

The back dated payment they are proposing covers the mortgage payments that were due at the time

– which would have been great if they had paid it at the time that I made the claim.

 

Because they didn’t pay at the time

– I wasn’t able to make my mortgage payments,

I got into arrears

Halifax tried to repossess the house.

 

 

I went through a string of court hearings and

I was only able to stop the repossession by securing a re-mortgage with a Higher Rate Lender at the 11th hour.

 

In a nutshell,

I ended up losing a substantial deposit in my house to pay for

the arrears, legal fees, early redemption charges etc.

and I’m now paying extortionate interest only re-mortgage payments

 

This is what I would term consequential loss

– i.e. if my claim had been paid at the time I made the claim then I would have been able to keep my mortgage

and none of the expense or trauma that ensured would have happened.

 

 

After my illness, I was able to go back to work and make the payments on my re-mortgage without issue.

My re-mortgage payments now are so much higher than what they would have been

had I been able to keep my previous mortgage.

The difference between the two is also part of the consequential loss going forwards.

 

The insurance company must know that I did make a claim in the past otherwise why would it pay now, years later.

I think they wanted to process a new back-dated claim

because it would mean they wouldn’t have to consider consequential loss at all.

 

I was hoping on some advice on whether this payment being back-dated

would mean I couldn’t apply for consequential loss?

 

Thank you

 

Sunny-side-up

[dx100uk]

totally agree with you!!

 

 

go for the lot.

IMHO i'd also get that new mortgage paid off as well

and make Halifax re-instate the old one properly

as if the whole thing never happened

to me you appear to have a very strong case

might bean idea to get an sar running

before stuff hits the shredder?

 

 

dx

[BankFodder]

There are some things I don't understand here.

 

I don't understand that you're saying that it was a mis-sold policy – and yet you appear to be claiming on it.

 

I don't understand why it was a mis-sold policy.

 

I don't understand why when you made a claim they apparently refused to pay out on it.

 

Maybe you clarify this briefly.

 

The next thing is that you should stop using the term "consequential loss".

Consequential losses often something which is not recoverable

and it tends to refer to losses which are not the direct cause of whatever error has occurred

and which may not have been foreseeable.

To be recoverable, losses must generally speaking be direct and foreseeable.

You are not doing yourself any favours by insisting that you are claiming for "consequential loss".

 

 

I suppose that they have got a bucket of correspondence from you referring to exactly this – "consequential loss".

 

 

Stop using it, and if anybody decides to pick you up on it

then say that you had no idea what you were talking about,

you thought it was a technical term but you're not a lawyer

and you're not an insurer and you weren't to know.

 

From what you have said so far, it seems to me that you are basing part of your argument on beliefs that you hold

– that various contacts have been made, by you or by others on your behalf.

Have you got any written evidence to support this?

 

I think one of the things that you're going to have to do is to send an SAR's to everyone who was concerned.

This means that you can have to send an SAR to the insurer, and to the medical people who you say were involved,

and anyone else who might hold records of contacts they have made with your insurers and what it was about.

 

I'm a bit concerned that you seem to be saying that there even is some dispute as to whether a claim was ever made

– and you are supporting your view that a claim was made simply by asking why on earth would they pay out now if no claim had been made?

 

 

I'm afraid that although this sounds like a reasonable position, it is not a dead cert for winning your case.

 

I think you need to tell us a little bit more carefully what each side have said,

what it's about, what evidence you have – rather than mere belief and supposition.

 

Who is insurer anyway?

And also how much we talking about here?

 

 

For the claim and also for the other losses which you say have been cause by their failure to honour

the insurance claim to begin with.

[Sunny-side-up]

Hello!

 

Thank you for your responses!

 

My apologies,

in trying to be brief I failed to communicate in my earlier post that the insurers have already issued me a payment (following my complaint).

The payment covers the mortgage payments for the period of time I was not able to work.

 

However, what it doesn’t cover (which was also in my complaint to them) was the other costs that were incurred by them not paying my initial claim at the time I made it.

 

 

The other costs being:

the mortgage arrears,

the lost deposit,

the legal fees

and the high interest payments on the new mortgage that I’m still paying.

 

I also did ask that they re-instate my old mortgage and clear my credit record of any entries related to the re-mortgage.

 

My question was really

now that the insurers have accepted a new back-dated claim and paid out on one of the things I’ve asked for (which I am happy about),

 

 

can I go back and say that really this doesn’t put me back to the financial position I would’ve been had they paid my claim at the time I made it?

 

..because it's a new back-dated claim (rather than them investigating the original claim does that limit what they will pay in terms of 'direct losses' ?

[BankFodder]

I think that we have already understood everything that you have just posted from your initial story. You have pretty well repeated all the information which you first gave us.

 

You need to answer the further questions I've posed before we can give you any other advice

[Sunny-side-up]

Hi BankFodder,

 

Thanks for raising some important questions – some of which I’ve struggled with answering in the past. I’ve pasted my comments below.

 

There are some things I don't understand here.

I don't understand why it was a mis-sold policy.

 

It was mis-sold because it was sold to me on the basis that it was a total mortgage protection policy that would cover my mortgage payments in any circumstances if I lost my income. I specifically asked if it would cover me if I was made redundant, or too ill to work and I was assured that it would hence the name ‘total mortgage protection’. I was also told I really should take out insurance to protect my mortgage payments and it was best to take out insurance with the mortgage lender itself. It was Halifax insurance that called me up and sold me this policy over the phone. They used a hard sell tactic – what if something happened – you could lose your home etc.. I bought into it and at the time I was actually happy that I had a safety net in place should the worst happen.

 

I don't understand that you're saying that it was a mis-sold policy and yet you appear to be claiming on it.

I didn’t know it was mis-sold at the time I purchased it, that only became apparent after I tried to make a claim. Even then, I didn’t really grasp the misspelling until the whole PPI scandal came out in the media and just because I made a claim on the policy doesn’t change the fact that the policy was mis-sold. Even if the insurers had paid the claim at the time I made it – the policy would still have been mis-sold.

 

If at the time when they sold me the policy they had said, ‘well actually there are lots of exclusions and it might be that you may get ill and are deemed not fit enough to work by medical staff, lose your income but we still decide not to pay your mortgage payments’ – well then I wouldn’t have accepted this particular policy.

 

I don't understand why when you made a claim they apparently refused to pay out on it.

Maybe you clarify this briefly.

 

They initially said they wouldn’t pay out, but after speaking to medical staff changed their view. They said they would consider the claim if a specialist (not just a GP) could provide a diagnosis. I was in the process of getting this diagnosis – which was taking months on the NHS, when they closed down my policy due to a missed premium payment. I was no longer working at the time and there was no money in my account. I did send a payment, which they have recorded on their system but they refused to re-open my policy and said they couldn’t even open a new one as I had a pre-existing condition.

 

The next thing is that you should stop using the term "consequential loss".

Consequential losses often something which is not recoverable and it tends to refer to losses which are not the direct cause of whatever error has occurred and which may not have been foreseeable.

To be recoverable, losses must generally speaking be direct and foreseeable.

You are not doing yourself any favours by insisting that you are claiming for "consequential loss".

 

Thanks for making that clear, this is really useful to know. I’ve not claimed for ‘consequential loss’ per se, what I claimed for was the mortgage payments that should have been paid, the deposit that was lost to pay for the arrears and the legal fees from the re-mortgage and the subsequent interest payments (at a much higher rate than I would have been paying had I stayed on my original mortgage plan).. Recently, I’ve been calling these things ‘the money lost as a consequence of the mis-sold policy and the failed claim on the mis-sold policy’ but I can see how that is not consequential loss as you’ve just explained.

 

I suppose that they have got a bucket of correspondence from you referring to exactly this – "consequential loss".

No, luckily I haven’t – because I’ve only used that term here. I will make sure not to use it again!

 

Stop using it, and if anybody decides to pick you up on it then say that you had no idea what you were talking about, you thought it was a technical term but you're not a lawyer and you're not an insurer and you weren't to know.

I will stop using it – thank you!

 

From what you have said so far, it seems to me that you are basing part of your argument on beliefs that you hold; that various contacts have been made, by you or by others on your behalf.

Have you got any written evidence to support this?

I think one of the things that you're going to have to do is to send an SAR's to everyone who was concerned.

I have the SAR data – which shows the dates of the phone calls – and very brief descriptions of what was said. I believe it was me pointing out that the calls were made and sending in PDFs of that data that made the insurance company change its mind and agree to a back-date claim. Actually, I think it was partly that and partly because I went through the Ombudsman that the insurance company responded.

 

I'm a bit concerned that you seem to be saying that there even is some dispute as to whether a claim was ever made and you are supporting your view that a claim was made simply by asking why on earth would they pay out now if no claim had been made?

They maintain they don’t have a record of an initial claim being made or rejected – but there are logs of the calls I’ve described above being made. The detail they recorded on those calls is also minimal.

 

Who is insurer anyway?

Halifax Insurance Ireland

 

And also how much we talking about here? For the claim and also for the other losses which you say have been cause by their failure to honour the insurance claim to begin with.

£26k for the mortgage payments minus the premiums amount that would have been paid had the policy continued.

The arrears, legal fees and early redemption charge are about £22k

My initial deposit on the house was £57k

My original repayment mortgage payments were £1,147 (£700 interest)

My new interest only mortgage payments are now £990, but were £1684 when the base rate was 5%.

 

Thank you for you help!

SSU