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Claims on unsecured loan insurance soar, ABI finds

Claims on unsecured loan insurance soar, ABI finds

Category: Loans

Updated: 29/01/2009
First Published: 28/01/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Growing numbers of people making claims on personal protection insurance (PPI) policies demonstrate their importance, it has been stated.

According to the Association of British Insurers (ABI), the total number of consumers with unsecured loans who made claims in November 2008 was nearly 120 per cent higher than a year earlier.

In total, more than 19,000 were registered, compared to less than 9,000 in the same month in 2007.

Director of general insurance and health at the ABI Nick Starling suggested that rising unemployment is to blame, as "many people are already feeling the effects of the recession".

"These figures are alarming, showing just how valuable PPI - and other types of protection insurance - are during difficult economic times," he added.

Meanwhile, consumer campaign group Which? has called for a ban on the sale of single premium PPI alongside unsecured loans, as this form of protection adds the cost of the insurance onto the loan itself, generating higher interest charges.

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