PPI unemployment claims soar by 118%

The Association of British Insurers (ABI) has reported that unemployment claims on Payment Protection Insurance (PPI) increased by 118% between November 07 and November 2008.

This represented a rise in claims of 8,772 to 19,105.

This rise in November unemployment claims comes on the back of a significant rise of 113% between October 2007 and October 2008, which followed a 69% rise between September 07 and September 08.

The ABI’s Director of General Insurance and Health, Nick Starling, said

‘Many people are 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. These figures are alarming, showing just how valuable PPI, and other types of protection insurance, are during difficult economic times.’

PPI has been much in the news recently with issues raised over how it has been sold and in particular how frequently premiums are charged as a single payment.

Both the FSA and the Competition Commission are actively working on improving practices.

So far a number of the high street banks have stopped sales of single premium PPI. There is expectation that others will follow.

Those that stop selling single premium PPI may continue to sell it with monthly payments.