Biba: Banks' personal loan insurance charges outrageous

Mon, 31 Oct 2005

Personal loan insurance offered by banks are four times more expensive than insurance offered by specialist brokers, the British Insurance Brokers' Association (Biba) says.

Credit card and personal loan borrowers are being urged by the association to shop around for more competitive deals than those available on the high street.

Chief executive of Biba, Eric Galbraith, told the Telegraph the fees charged by banks are "outrageous".

The trade body found that people who buy personal loan insurance from their lender could pay up to 340 per cent more than if they would have taken out insurance from an independent insurance broker.

Mr Galbraith said banking customers often assume their personal loan provider can be trusted to give them value for money when they need payment protection insurance. "But this is often not the case," he told the newspaper.

Consumers are being urged to exercise their right to choose to purchase insurance elsewhere. Mr Galbraith said consumers should search the insurance market and compare different insurance policies before committing themselves.

An online trading programme to sell payment protection insurance will be launched this week by Biba and the Chartered Insurance Institute, the Telegraph reports.

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