Income Protection Insurance

[landlor]

Hello Friends,

 

Are Insurance companies allowed to sell policies to people who are not eligible?

 

I had bought MMS homeowner policy in Dec-15 and when I went to claim today, they refused saying that I was not holding mortgage in Dec-15. I had a mortgage in Feb-16.

 

i had taken this income protection policy in Dec-15 in advance so as to protect me from commitments of mortgage.

 

How was I wrong in that?

I don't remember what questions the seller (ActiveQuotes) asked me when selling this policy with regards to my eligibility.

 

Its possible that because I was going to have a mortgage soon,

just waiting for exchange to happen,

I would have said that I have a mortgage.

 

However, that is speculative.

If it was so mandatory should they not have asked documents to prove my current mortgage.

 

They did not give me insurance initially in Sept-15 as I was still in probation and had not covered six months with my current employment.

 

So should they not have checked for my mortgage as well.

And given that I anyway soon became mortgage owner, do I not come under the cover.

 

Excerpt from the Policy:

 

You are eligible to take out this cover if you are:

Living in the UK.

Named as a person responsible for a mortgage or

named as owner of your primary residence.

 

Does this clause mean that I could not have bought the policy? Any ideas on this, please.

 

Can the insurance companies sell such important policies without checks and only to leave the person stranded when he needs it?

[martin2006]

On the surface it looks like if you did not have a mortgage at the time you took out the policy and the policy terms state you must be named as a mortgage holder from the start of the policy, then i dont see the insurers have done any wrong here. Effectively you were insuring nothing.

The only thing you may be able to argue is if you applied fir the mortgage in dec 15 but it didnt complete until Feb 16.

[dx100uk]

Reclaimable then?

[landlor]

My mortgage was offered by HSBC, on 25-Nov itself and was in wait only for exchange to happen. I had already paid the mortgage fees. Does that help? Also does it matter weather I had mortgages the time time of purchasing policy. I anyway had one in Feb and had bee paying the premium.

 

And if I was not eligible, then can they sell the policy?

Edited January 4, 2017 by landlor

[honeybee13]

Hello there.

 

I don't remember what questions the seller (ActiveQuotes) asked me when selling this policy with regards to my eligibility.

 

From looking online, it seems that ActiveQuotes is a comparison site. Are you sure they sold you the policy?

 

HB

[honeybee13]

Is this the MMS whose policy you have? According to their website, they only deal through intermediaries.

 

http://www.homeownerinsure.co.uk/

 

HB

[landlor]

Yes, thats the policy.

 

I got a call from them after I did a search on gocompare for income protection policy. A lady called me back in Sept-15 and as I had not completed my probation yet, final purchase was deferred till 17-Dec-15, after my probation was confirmed.

 

Can you please advise? How else will people purchase protection for mortgage? Naturally before mortgage starts?

Edited January 4, 2017 by landlor

[honeybee13]

Sorry, I don't understand who sold you the policy.

 

HB

[landlor]

An advisor from ActiveQuotes

[honeybee13]

Can you please advise? How else will people purchase protection for mortgage? Naturally before mortgage starts?

 

When I was involved with mortgage cover, it started at the same time as the mortgage.

 

What documentation do you have from Active Quote, did you sign an agreement with them? The small print on their website says that you're responsible for the accuracy of your information, last sentence on their homepage.

 

https://www.activequote.com/

 

HB

[landlor]

There was no signature as such. everything over the phone.

 

If I got the policy started before the mortgage started. Don't see how that effects the root of contract.

[honeybee13]

I don't know the answer to the root of the contract question and have asked an insurance guru to look in here.

 

In case it's relevant, the wording of MMS's cover is below. This is the post August 2016 wording, the one for your policy isn't on their website; you have to refer to them.

 

'To take out this cover you must be:

Aged 18 and over and under 63,

 

In paid full-time active work (for at least 16 hours per week) and have completed any probationary period and living in the UK. Any form of temporary work including, but not limited to, agency work, seasonal work, zero hours contract, overarching contract, irregular work or work that is not guaranteed does not qualify as full-time work. You must have worked for the same employer for at least 6 months uninterrupted continuously prior to cover,

 

Named as a person responsible for a mortgage or named as owner of your primary residence,

 

Unaware of any impending disability or unemployment and able to sign the declaration without any reservation or qualification.

 

(Please also refer to “what is not covered? (Exclusions)” on page 2 of this document).

 

(For the full list of Exclusions, please refer to the certificate of insurance).'

 

http://www.homeownerinsure.co.uk/

Edited January 5, 2017 by honeybee13
Link.

[unclebulgaria67]

Not my area of knowledge.

 

But i think you may have a valid claim, if you can evidence that a mortgage application was going throught at the time. You need to be able to show that you were in process of being legally liable for mortgage. Mortgage company may be able to supply a letter confirming the position at time you bought the Insurance i.e you were already committed to the mortage, subject to ..........

 

I can't see how you can be punished for jumping the gun and taking out the Insurance too early.

 

Activequote or any other comparison sites acting as agents for Insurers can be held accountable for any information they provide and you can complain to the FOS. Have you complained to Activequote about this ? Surely they can help resolve this, as they should have told you to only take out the policy when the mortgage completed. They might be able to contact the Insurers to obtain a resolution.

[landlor]

Many Thanks HB and Unclebulgaria.

 

I have escalated it to ActiveQuotes and they will get back tomorow. I will await response from the Guru that HB mentioned.

 

My policy wording is also the same. Its so unfair of insurance companies to draw away the safety net when needed. It is more profitable for them to sell policy to a wrong person since he/she will not be able to claim at all. It becomes a risk-less gain for them.

Edited January 5, 2017 by landlor

[honeybee13]

Many Thanks HB and Unclebulgaria.

 

I have escalated it to ActiveQuotes and they will get back tomorow. I will await response from the Guru that HB mentioned.

 

My policy wording is also the same. Its so unfair of insurance companies to draw away the safety net when needed. It is more profitable for them to sell policy to a wrong person since he/she will not be able to claim at all. It becomes a risk-less gain for them.

 

In their defence, the insurer didn't sell you the policy, from what you're saying it was ActiveQuote.

 

The guru was unclebulgaria67 actually.

 

HB

[landlor]

Thanks UncleBulgaria for your reply.

 

Have you come across such situation earlier? How strong is my position with regards to be able to claim.

 

Is it not that contracts have to be interpreted keeping in view what is reasonable. As it is, the original root/motive of contract is not violated.

 

Which court will it be that I will have to approach, if at all?

 

Thanks.

[unclebulgaria67]

Thanks UncleBulgaria for your reply.

 

Have you come across such situation earlier? How strong is my position with regards to be able to claim.

 

Is it not that contracts have to be interpreted keeping in view what is reasonable. As it is, the original root/motive of contract is not violated.

 

Which court will it be that I will have to approach, if at all?

 

Thanks.

 

I can't see it makes any difference to claiming, if you took out the policy too early. Just means you paid a premium earlier than it was needed.

 

The point is that you were taking out a mortgage and purchased relevant Insurance.

 

The FOS should be able to resolve this, without you having to go near a court. Active quote and the Insurers would both have responsibility.

[landlor]

Thanks UncleBulgaria for reply.

 

My experience with ombudsman has been less satisfactory. There was one occasion with Travel insurance, when court overturned the decision given by ombudsman.

That's why I want to go to court. So if I am "reasonably " right in having bought the insurance a bit early, then the court will grant it. Ombudsman will always tip "reasonableness" in favour of business.

 

UncleBulgaria, Have you ever heard of this kind of situation and what the ultimate resolution was?

 

Also if someone asked me a question "Do I have a mortgage", what would one say if mortgage process is only waiting for exchange to happen?

[unclebulgaria67]

No personal experience.

 

But ICOBS rules that apply to both sale and performance of insurance contract should be in your favour.

 

Search online for FCA ICOBS handbook and have a read through.

 

I think 2 points are relevant.

 

Sale of policy - they should warn you about taking out Insurance too early, if this was an issue that would lead to claims being rejected.

 

Claims- no rejecting claims in an unfair way.

 

Make a formal complaint and threaten to issue a court claim against the Insurers, if you feel that is the best way.

[honeybee13]

How did it go with ActiveQuote today, landlor?

 

HB

[landlor]

They said they will get back tomorrow. Thanks HB. I will keep the forum posted. I am feeling so disastrous after they told I will not be covered. I was just looking at the emails I had with Active-quotes.

 

I asked them various questions on various scenarios but none of them are related to mortgage. Neither did the adviser ask any question. If you think of any other senior member who might be able to advise me, please request him from my side. Thanks to you as well.

[landlor]

Just wondering if anyone here in the forum had similar issues? Please let me know, if you came across this thread.

[landlor]

Hey Just now, I was able to hear the call recording.

 

At sixth minute, I have said that "I am going to become an owner and will have a mortgage soon and am taking the policy to cover that". So in response to this she said that she knows and that I had mentioned it during the earlier conversation as well.

 

After that at around 16th minute, she took me through eligibility questions again. So she asked Are you a named person responsible for Mortgage and I said Yes.

 

What now?

[unclebulgaria67]

Hey Just now, I was able to hear the call recording.

 

At sixth minute, I have said that "I am going to become an owner and will have a mortgage soon and am taking the policy to cover that". So in response to this she said that she knows and that I had mentioned it during the earlier conversation as well.

 

After that at around 16th minute, she took me through eligibility questions again. So she asked Are you a named person responsible for Mortgage and I said Yes.

 

What now?

 

The point is that not many people would wait until completion before taking out this type of Insurance. You were taking out the policy, as you were in the process of becoming liable for a mortgage and just jumped the gun in buying the policy too early. The consequence is that you started paying the premium too early.

 

The call recording is proof that you told them the Insurance was part of a current mortage application that was going through.

 

ICOBS should help you here. Insurers can't use these slight technicalities to avoid paying a claim. It is an unfair act.

[landlor]

Thanks UncleBulgaria for reply.

 

ActiveQuote said they will get back on Monday with their final conclusion on this.