My battle with the Abbey National (National & Provincial ) goes on.My question is ,Why did we pay for a MIG in the first place?,was it just to make money for the "Fat Cats" I thought that if you took out insurance then the insurance company paid out the claim and that was it, after all if you take out home insurance and you make a claim they pay out and thats the end. Why did'nt the lenders just say " well if their is a shortfall you have to pay. If they are chasing money apparently paid out by the insurers why did they bother in the first place.Maybe it's me but I just don't get it. Lastly I urge everone who is caught up in a shortfall claim to write to their MP. I have just had a reply from a leading head of Government and he is deeply disturbed about my situation which can't be much different from yours. He is taking it further and hopefully some good will come of it.Please, Please , write to your MP, the more people who write the more can be done to stop this happening. Best wishes to you all. If you wish to no more please feel free to Email me privately.

-- Stephen (mamba@moss82.fsnet.co.uk), September 04, 2001

Answers

You need to understand how insurance works to understand how MIGs work.

The MIG is bought by you, on behalf of the lender, to protect them against you failing to pay back the mortgage. It's insurance, but it's insurance for the LENDER, not for you.

With insurance, if the insurer pays out a claim, and can point at a person/persons/organisation who is responsible for them having to pay out they are legally entitled to pursue that person (or whatever) for the amount they've paid (plus costs).

If you take car insurance as an analogy:

Let's say I'm in my car and you drive into the back of me. It's obviously your fault, so my insurer (I have fully comp.) pay to have my car fixed. Now, it's your fault, so they come after you for the amount owed. If you have YOUR OWN insurance, then your insurance company settles, but if you're uninsured then you are PERSONALLY responsible for this amount of money. (and what you did was illegal too, but I'll ignore that as it isn't relevant)

So far, so good - where MIGs got such a bad press (and deservedly so) is that they were sold as protection for the PURCHASER - it was never made clear that you would STILL be liable for the debt if the mortgage company claimed for some reason.

I hope that's made things clear. Whether it's right or wrong is another matter, but them's the facts.

-- Chris (chrsh@hotmail.com), September 05, 2001.