Response to right of subrogation

MIG policies are all subject to this wheeze as I understand it - it is a matter of statute, not of contract - in other words, it doesn't have to say anything about it on the document itself because it's already been set as a general rule in a court (I think the ruling, which I'm afraid I can't remember the reference for, was based on the fact that a MIG, despite its name, is not a guarantee, but an insurance.) What it means is that once the policy has paid out (to the lender) the insurance company that made the payment endows the recipient of the payment (ie your friendly mortgage company) with the right to chase you for the money with which to reimburse the insurance company. Got that? So you have paid for insurance out of your pocket so the mortgage company shouldn't end up losing out, and if a claim is made on that insurance, it is your money that pays for that too! Recently there have been rumours that certain lenders have been claiming back money using their right of subrogation under MIG policies, but then not paying it all back to the insurers as they should.

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