Owner-drivers to lose benefit
Page 8
If you've noticed an error in this article please click here to report it so we can fix it.
by Lee Mather • Owner-drivers will be no longer be eligible for mortgage interest payments from the Government if they are forced out of work, but self-employed workers should find it easier and cheaper to take out mortgage protection insurance.
Experts believe the rush of insurers to fill the gap left by the Government's withdrawal of income benefits for some home owners will reduce premiums.
From 1 October the Government stopped paying mortgage interest to unemployed new home owners until nine months after they lose their jobs.
Existing homeowners who become unemployed will not receive interest payment benefits for two months, and will only then receive half the payments for the following four months.
Mortgage insurance pre miums may already be falling from the current average of £5-£7 per month for every £100 of insurance, says Suzanne Moore of the Association of British Insurers.
GA Direct, for example, plans to charge between £4-£5 per £100 of mortgage protection insurance.
Moore believes that insurers will drop their rates because the change will allow them to spread their risk over many more insurers. "Up to now, selfemployed people have found it more difficult to get cover at the same rates as the employed," she says.
Insurers say that selfemployed truck drivers who have worked at least 16 hours per week for six months are unlikely to be refused insurance. But the companies will examine the contract terms which owner-drivers work under and are likely to vary their rates accordingly.