Payment protection insurance booms as redundancy fears bite

Payment protection insurance for loans and mortgages is booming as recession and redundancy fears bite.

The demand for payment protection insurance (PPI) is growing as the fear of redundancy grows, according to Paymentcare, a provider of loan protection insurance.

With the recent bad press about the miss selling of PPI policies, many borrowers decided not to take out insurance to cover their loans and mortgages.

The looming threat of the recession and redundancy is convincing an increasing number of borrowers to change their minds and to seek out cost effective insurance for their loan repayments.

According to Shane Craig, managing director of Paymentcare, “It’s the “R” word that frightens borrowers most. Their main concern is to protect their home and stay as far away from the dreaded prospect of repossession.”

“Their perception of risk has changed. People who wouldn’t have considered the idea of insurance this time last year are no longer confident that they can escape the credit crunch unscathed.”

These findings come at a time of scrutiny for the PPI industry. Around 13 million PPI policies have been sold to UK consumers, however this type of insurance has attracted many complaints of miss-selling, triggering an investigation by the Competition Commission.