Monthly Archives: July 2012

Top tips for choosing mortgage insurance – FAQs

Here are some questions and tips relating to the selection of mortgage insurance.

Is all mortgage protection insurance similar?

In the sense that policies typically look to help you continue to pay your mortgage should misfortune mean that you are unable to do so, then yes, they may be seen as being broadly similar.

However, policies may differ significantly in terms of the exact nature of the risks covered, how they work, how long they will continue to pay your mortgage for and their qualifying terms and conditions (etc).

What are the main types?

There are a significant number to choose from, including:

  • MPPI (Mortgage Payment Protection Insurance) – a form of cover that will continue to pay your mortgage (typically directly to the lender) for a specified period of time of perhaps 1-2 years;
  • Mortgage life cover – this form of policy may pay off your outstanding mortgage debt in the event of the death of the insured.

There may be other forms of related cover such as income protection insurance.  Insurance providers’ sites may provide more details, such as the overviews contained on sites such as Drewberry mortgage protection insurance.

How can you tell which sort of cover is best in what circumstances?

By reading the product description and deciding how suitable it is for your individual circumstances.

That may also imply that it makes sense to shop around and look at a number of options to ensure that you are broadly familiar with what is available in the marketplace.

What sorts of risk are covered by mortgage insurance?

That may vary by policy but typically things such as:

  • redundancy (compulsory only);
  • accidents and sickness that make it impossible to work;
  • death and critical illness etc.

Can I cover things such as pregnancy and self-employment etc?

That rather depends against the risks you are trying to cover.

If you are looking to protect your income against the possibility of losing your job, typically this may only apply to situations where you have been made compulsorily redundant or are certified as being too ill to work etc.

Typically, situations that you may be deemed to be fully or partly responsible for, such as pregnancy, career breaks or some forms of dismissal might not be covered.

For similar reasons, it might be difficult to obtain this type of insurance if you are self-employed.

By contrast, cover for sickness or death may, of course, apply to wider categories.

Once again, it is imperative that you read carefully the detail of any policy before you purchase it.

Why are German caravans harder to insure?

If you are thinking about investing some of your hard earned cash in a German made caravan, then you may be a little worried about some of tales you may have heard from other caravanners about it being difficult to find insurance cover for these tourers.

To some extent these fears may not be unfounded and it may certainly be the case that in the past, caravan cover providers may have steered clear of providing cover for certain German makes and models.

The build quality of these vehicles typically meant that not only were they expensive to purchase in the first place, it also made them prime targets for those would be caravanners who may have wanted the experience of owning such a caravan without the hassle of actually going out and buying one for themselves.

If you couple this with the situation where spare parts may have been expensive and hard to come by locally, then you could probably understand why insurance for such vehicles may have been prohibitively high.

These days though you may find that there are now specialist providers of German caravan insurance who are happy to offer policies at cost attractive premiums for German caravans.

What you won’t typically find though at least with some providers, is that this cover is provided at the expense of compromising on the levels of cover on offer and you may find that policies are available which can provide a generous 280 days of continental travel per annum as standard.

You may typically also find that there may be various opportunities for you to earn a discount on premium costs. These may be available if you:

  • belong to a recognised caravan club or association – this is typically viewed by insurance providers as a sign of a mature and responsible caravanner and membership also provides an ideal forum  for the exchange of hints and tips and the passing on of knowledge and experience;
  • agree to garage your caravan in a specially designated CaSSOA site over the closed season, keeping it safer form the risks of theft and vandalism;
  • if a CaSSOa site in not an option for you then at least keeping your caravan in your driveway and off or the public highway may help;
  • fit a tracking device and alarm system which may also help to reduce risks of theft and break-ins.

You may wish to remember to read through the terms and conditions of your German caravan cover as these may stipulate situations where the use of a wheel clamp and hitchlock are required to maintain your cover.