In reply to captain paranoia:
> (In reply to crustypunkuk)
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> That figure starts to explain the sums of money the banks are writing off to pay for this. I had previously wondered just how much people had been paying for loan insurance.
Average claim is less than three grand, because most mortgage PPI wasn't missold. In fact, there's probably rather less misselling than you might be led to believe - but the record keeping was so crap you can't prove otherwise. In my last job we turned down 75% of mortgage PPI claims because they'd never had PPI, and almost every other claim because we had a form, signed by the customer (and in many cases their financial adviser) saying they understood the conditions and the exclusions. We also turned down quite a few because the customer had had rather more paid out to them in payment to cover their mortgage payments - which was, of course, the point of the insurance in the first place. But don't let the fact a product performed exactly as it was supposed to discourage anyone from claiming they were missold it.
> ps. Any chance of mis-selling of credit card insurance? When I got a card with the scumbags MBNA, they pushed very, very hard for me to take out insurance, and I kept laughing at them; their basic assumption seemed to be that I would run up tens of thousands of debt on the card, and not be able to pay it off if I lost my job, both assumptions very wide of the mark, since I was getting the card i) to get a free stove and ii) purely for the CCA protection, intending to pay off the card fully every month.
Credit card payment protection insurance is PPI - it's "payment protection insurance". But if you never had a balance you'll never have paid any premiums.