Payment Protection Insurance - Mortgage compensation

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Payment protection insurance costs

CAB table of premiums with and without PPI

Loan Type	Loan Amount	PPI Premium	Premium as % of total loan
Unsecured personal loan	£8,933	£2,217	25%
Unsecured personal loan	£11,000	£5,133	47%
HP for car	£5,059	£2,157	43%
HP for car	£6,895	£2,317	34%
Unsecured loan	£5,600	£744	13%
Secured loan	£25,000	£12,127	49%
Secured loan	£35,000	£10,150	29%
Conditional sale for car	£4,300	£2,394	56%
Unsecured personal loan	£13,000	£3,367	26%

Source Citizens Advice Bureau evidence report

The revenue from this type of revenue is massive and the incentive to make sure you end up with PPI or some other form of payment protection is even bigger.

Compensation ppi

Payment Protection Insurance - (PPI)

Millions of borrowers take out payment protection insurance (PPI) to provide security and reassurance for times of crisis and help upkeep their payments on loans, mortgages and other commitments in the event of accident, sickness or unemployment.

The PPI market is massive, around seven million policies are taken out annually. This business generates an incredible £5 billion in premiums for the lenders and the insurance companies offering these products.

If you have ever taken out personal loans, mortgages or almost any credit agreement recently you will probably have encountered payment protection insurance, PPI can be a lifesaver for some people.

On the other hand statistics provided by the government reveal only 4% of people who take out PPI on their credit agreements ever claim on their policies and that 85% of those claimants is refused their claim.

About 60% of payment protection policies are sold in conjunction with unsecured personal loans, with the remainder being related to credit card, secured loans, store card and mortgage borrowing.

Up to 85% of claims made by PPI holders fail, many due to the policy being miss sold or unsuitable for the individual.