Payment Protection Insurance (PPI) – Car Protect – Payment Protection Plan

Amtrust International Underwriters Ltd

What did we think was unfair?

A term stated that customers were not given a refund of the single (upfront) premium paid for the policy, even if they repaid the loan it was linked to early (but after the statutory cancellation period).

Why did we think it was unfair?

It effectively made customers keep a valueless policy which no longer carried a risk for the insurer.

What has the firm done?

They have agreed to change the term in all new policies. They will now offer a pro–rata refund of premiums if customers repay the loan it is linked to early.

The new term also allows, in some circumstances, for a refund of premiums after the statutory cancellation period even if the loan the policy is linked to is still outstanding.

It has also agreed the following:

• To apply the new term in practice to its existing customers and tell them it will be doing so.
• To change its other payment protection insurance policies.
• To amend its documents.

Old term

'You may cancel within 30 days of the Insurance Start Date and We will refund any Premium You may have paid. No refunds of Premium will be payable if cancellation is received after the first 30 days and the Insurance will remain effective until the Finishing Date of Cover. No refund of Premium will be payable where a claim has been made under this Insurance.'

New term

'If you are not entirely happy with the cover, you may cancel within 30 days of the Insurance start date and we will refund any premium you may have paid, otherwise we will offer a pro–rata refund of premium. No refund of premium will be payable in respect of cancellation after the first 30 days where the cancellation arises out of a default by you. No refund of premium will be made where a claim has been paid on the Insurance.'

What next?

Read more agreements from firms – see Payment protection insurance – Refund of single premiums.

Read more about Payment protection insurance.

Read more about our work on Unfair contract terms.