Skipton's free cover under fire
Thursday 15 June 1995
Despite their own criticism of Skipton's initiative, however, several top-10 building societies are asking insurers to devise almost identical policies for their borrowers.
Skipton's free policies, available from October, will not cover homebuyers in the event of accident or sickness. If they want greater protection, borrowers will have to pay more.
Skipton's exclusions come as lenders have come under fire for the tight limits on eligibility applied on mortgage protection insurance. About half the claims are made because of unemployment, with the rest attributed to accident or sickness.
Norman Shuker, joint managing director at Pinnacle Insurance, which provides cover to many mortgage lenders, said: "Current mortgage protection policies offer far wider cover and superior benefits than those proposed by Skipton.
"Although its cover would be 'free', what is its true value if it provides less cover than existing policies? Is what is being done by Skipton an example of the best practice for other lenders to follow?"
An executive at another large insurer, who refused to be named, said: "All of us are now trying to come out with packages which offer more cover for less money. The danger is that Skipton is not only jumping the gun, but offering something which may not actually fit their clients' real future needs."
Skipton's plan drew widespread publicity when it was announced last week. It pays a borrower's mortgage interest for up to seven months of a period of unemployment, after a 60-day wait. The policy dovetails with plans by the Department of Social Security not to pay mortgage interest to new borrowers for the first nine months of a claim.
Existing borrowers will wait two months and 50 per cent of their interest will be paid for four months thereafter.
For those needing full accident, sickness and unemployment cover, Skipton will charge borrowers pounds 4.50 per pounds 100 of a loan, about 30 per cent less than market rates. David Charlton, assistant general manager, said: "We have never said this was a panacea. If anyone wants insurance that includes other things, which is substantially more expensive, we have negotiated a rate two-thirds of the market rate. We are trying to protect our customers."
- 1 Howard Jacobson: Let's see the 'criticism' of Israel for what it really is
- 3 Belgium fan Axelle Despiegelaere lands L'Oreal campaign after World Cup viral photo
- 4 Britney Spears sings 'Alien' without Auto-Tune in embarrassing leaked audio clip
- 5 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
Instagram of US airport security chiefs: Lipstick knives and IED training kits among items seized
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Mick Jagger denies being World Cup curse and reason for Brazil’s embarrassing defeat
Israel-Gaza crisis: ‘We just want it to end… We don’t deserve to live like this’
Israel-Gaza crisis: Eight killed in Gaza Strip cafe while watching World Cup semi-final
Sustained immigration has not harmed Britons' employment, say government advisers
Australia facing international condemnation after turning around Sri Lankans at sea
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
There’s a nasty smell in the political air – and it’s coming from the Tories
iJobs Money & Business
£12 - £15 per hour: Cameron Kennedy Recruitment: Excellent opportunity to join...
£400 per hour: Orgtel: Technical Business Analyst - Banking - Bristol - £400pd...
£38000 - £42000 per annum + competitive: Real Staffing: Required skills:Previo...
£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...