Surge in Number of PPI Claims

Payment protection insurance (PPI) claims have soared by 118 per cent in the last year, prompting the Association of British Insurers (ABI) to stress the importance of having such cover.

The association attributed the rise to the increased number of redundancies in the UK, which has led to many having to claim on their insurance policies, in order to cope with financial pressure.

According to the statistics, the biggest jump came in November, when 19,105 individuals made an unemployment claim on their PPI in comparison to 8,772 the previous year.

However, October also saw a huge increase in claims with a 113 per cent rise of people doing so from 2007 to 2008.

The ABI commented: “These figures demonstrate the value of PPI and the determination of insurers to help people cope with losing their job.”

Protection insurance “valuable” despite controversy

The PPI sector has come under fire in recent times, due to widespread criticism that people are being pressured into buying expensive PPI policies.

Indeed, consumer watchdog, Which? has estimated that around two million PPI policies may have been mis-sold to customers who were not qualified for cover, such as persons who are self-employed, over 65 or have pre-existing medical conditions.

But there has been agreement in the industry that people do need a product which can protect them, should the unexpected happen.

Nick Starling, the ABI’s director of general insurance and health, commented: “Many people are already feeling the effects of the recession, through rising unemployment.”

“Losing your job is stressful enough, and even more so when you don’t have any protection in place to help ease the financial burden.”

The Competition Commission also highlighted the importance of comparing PPI policies, in order for consumers to get the most comprehensive deal for their situation.