If you have been involved in an accident that has led to you having to take time off work, then you might be struggling to afford your mortgage. It’s a worrying time, but thankfully there are some things that you can do with specialist legal and insurance support.
Your personal injury solicitor can advise on what legal routes to take with regards to getting compensation for time off work which could help, but there’s also another aspect that is often overlooked – payment protection insurance.
Payment protection insurance is also known as short term income protection and can gives people the peace of mind in knowing their mortgage will be covered in the event of not being able to work.
These policies are very useful if you are concerned you won’t be able to cope financially should you not be able to work due to ill health or lose your job due to redundancy.
By combining compensation after a work accident with mortgage protection insurance, you can safeguard against not being able to pay for your mortgage should you be unable to work and earn income.
What is Mortgage Protection Insurance
The excellent Money Saving Expert website by Martin Lewis has a great overview on what to consider with mortgage payment protection insurances.
“Many homeowners’ worst fear is missed mortgage payments, and ultimately repossession, which is why mortgage payment protection insurance can be an effective product. Yet many people pay massively over the odds. This guide explains the basics of MPPI, asks whether you need cover and outlines some of the cheapest policies on the market.”
You can read their guide on the MoneySavingExpert.com website.
Most mortgage protection policies tend to be limited to time. That means that they will only pay you for a set period of time.
So, it’s important to do your research into the type of mortgage payment protection insurance policy you take out.
Read the Money Saving Expert guide linked above for a really good introduction.
There is also another guide which gives a really in-depth overview of what this insurance entails.
Why Mortgage Protection is Important
You might be able to get support from the government if you are unable to keep up your mortgage repayments. You might also win a settlement of compensation with your personal injury solicitor.
But this might not always be the case, and it might not be enough to help you pay your mortgage monthly payments on time or in full.
Should You Get Cover?
Could you afford your mortgage repayments if you were ill, injured, lost your job, and were unable to work with no regular income coming in?
If you answer yes to those questions, mortgage protection insurance might be suitable.
Be aware though, most insurance policies like this only tend to offer coverage for 12 months.
If your injury means you can’t work in excess of that, you will have to fall back on savings.
Some companies will give high redundancy pay-outs if you have been with them for a long period of time. You might also qualify for sick pay.
In cases like that, you might feel this type of insurance is unnecessary.
It all boils down to personal choice.
How Does Mortgage Protection Insurance Work?
Most policies will start to pay-out between 1 and 2 months after the point you were unable to work and earn money.
The better insurance policies out there will offer something called a “back to day one” term, which means they will then back date your insurance payments to the point at which the injury occurred and you were out of work.
The majority of insurers have annual terms on their policies, meaning you will only be covered financially for 12 months. You can also get shorter term 3-month policies, but no matter which time length you opt for, the maximum monthly pay-outs will be capped between £1,500 and £2,000.
If you do decide to take our mortgage protection, think very carefully and plan contingencies in place to help you when the coverage won’t be enough, or ends.
And lastly, most of these policies have a timeframe you have to complete after taking it out before you can claim for unemployment.
For example, you can’t take the insurance out and then the next day say you are no longer working and demand insurance pay-outs.
With work injuries, it’s not the case though and you will be covered straight from day one.
Changing Your Mortgage to a Cheaper Rate
Another aspect you could consider is changing your mortgage provider. Many people don’t realise that the rates they are tied into on their mortgage don’t have to be forever.
By swapping to a different mortgage lender, you could get a cheaper rate, making your mortgage repayments more affordable whilst you are unable to work.
The best route to explore this option would be to talk with a mortgage broker who is independent and free to explore the whole market.
They will then help you find a cheaper rate and a different lender to switch to. There’s advice on how to change your mortgage on this website.
There a plenty of websites on the Internet which let you find good independent mortgage brokers, so shop around and possibly ask your friends.
How a Personal Injury Solicitor Can Help
Whilst they can’t offer you mortgage protection insurance, what they can do is provide support after you have had a work accident and are unable to work.
Personal injury solicitors work on a no win no fee basis and will seek compensation to help you pay for a range of aspects.
This can include:
- Medical bills
- Travel costs
- Loss of earnings
- Future loss of earnings
If you have been injured in an accident at work, and don’t have mortgage protection insurance in place, personal injury compensation could be invaluable to you.
To talk to us about a claim and to be put in touch with one of our expert personal injury solicitors call us today or complete the contact form you see on the website.
You will spend a few minutes talking to one of our specialist staff, who can then advise you if you might have a claim. They can then connect you up with one of our experienced lawyers from our national panel.