For most Brits, a house is the most important investment they will make during a lifetime, both from a financial perspective, and a lifestyle perspective. It makes sense, then, that people would do everything they can, within practical terms, to protect this investment. It is strange that only one third of all Brits take advantage of one of the best ways to protect their investments from short-term job or income loss. While 60 per cent of new home owners are buying mortgage cover, many are still without this relatively modest protection that could make the difference between keeping and losing one's home.



Part of the reason that many continue to live without the protection is that they do not understand the benefits of it. Amazingly, some people that do have the insurance are not even aware that they have it, or do not understand what it does. Even more surprising, some people have the insurance, but are not even eligible to collect its benefits should a need arise.

Mortgage cover is part of a group of short-term mortgage insurances known as mortgage payment protection insurance (MPPI). These insurance products are usually one to two years in nature. They are designed to protect home owners who face involuntary redundancy, prolonged illness, or accident, and need assistance to meet monthly mortgage payments and additional expenses. MPPI products fall under a broader umbrella of related products known as payment protection insurance (PPI). Mortgage cover, income payment protection, and loan payment protection are the three basic types of PPI products.

Another reason that many Brits do not have the insurance is that they believe the State will provide enough assistance in the event of job loss. The reality is, new home owners receive no coverage for nine months from the state, based on rules established in October of 1995. Support for prior home owners is very limited. Most Brits on a budget need either some assistance, or much assistance, to meet their monthly mortgage needs.

Another reason some people are unprepared with the proper protection is that until recently, high street banks and lenders have reigned over the industry. They have notoriously charged high premiums to consumers, often packaging the insurance with mortgages, credit cards, or personal loans, with either modest mention, or no mention at all. Some have barely noted the premium expense in the fine print of other disclosures.

Thanks to efforts by Citizens Advice, and other consumer groups, the Competition Commission is set to announce results of its investigation into industry practices, in February of 2009. Their announcement should result in increased effort for fair selling to customers. If nothing else, the investigation has lead to great consumer awareness of the selling tactics, and questionable practices of some banks and lenders.

As importantly, more consumers now realize there is a good low cost option for obtaining mortgage cover. Insurance brokers commonly have similar coverage for 40 to 80 per cent less than traditional sellers. They also have a better reputation for making customer interests their top priority. Many Brits need the mortgage protection to save their homes in the event of unemployment. It is good to know they have more options now than ever.