Unemployment insurance is an effective debt management tool, giving a much-needed cash boost to people in the midst of a financial crisis. When an income is lost because of redundancy, it can have a devastating effect on a household’s cash flow. Whilst the salary may have stopped, monthly bills will not and if provision is not made to temporarily replace that income with cash from another source, debts will inevitably build-up and could spiral out of control.
With fewer people having savings to draw upon, unemployment insurance provides an invaluable cash boost – plugging the financial gaps and ensuring debts are managed. As well as providing a financial cushion, it eases the pressure that surrounds a job loss, leaving the claimant free to concentrate on securing another position, rather than worrying about where the next penny will come from.
Unemployment insurance replaces a lost salary with a pre-agreed monthly amount that can be used to pay a wide range of bills such as the rent, a mortgage, council tax and utility bills, plus the all-important weekly food shop.
Claimants can receive payments for up to a year and the cover ensures families have enough to live on during times of financial hardship. Despite its many benefits, the reputation of unemployment insurance providers has been sullied over the years by a number of credit providers such as banks, building societies, motor traders and credit card and catalogue firms who have mis-sold this cover.
In a bid to boost their profits, credit providers adopted a quantity, rather than quality approach and consistently pressurised customers into taking out cover by giving the impression it was a condition of the loan. Recognising the obvious benefits of having a ‘captive audience’, they abused their positions of trust and charged exorbitant premiums for policies which in many cases would fail to pay out (having failed to check their customers’ suitability for a policy in the first place).
Although consumer bodies were taking providers to task for their unethical behaviour and consequently lenders were coming under increasing scrutiny from the Financial Services Authority and Competition Commission for the appalling way they treated their customers, this did not better-inform those who were falling victim to their underhand sales tactics. As a result, we undertook a high-profile lobbying campaign to ensure consumers were aware of their suitability for this cover, the pricing structures and options to purchase elsewhere.
It was also clear the more-ethical providers needed to raise consumer confidence in a product that could make a difference between keeping and losing a home and more importantly, consumers badly-needed a ‘champion’ to protect their interests. We are keen to fulfil this role and work alongside consumer and trade bodies, plus harness the power of the media to launch an agenda for change.
The objectives were to; expose lenders unethical selling tactics, campaign for a change in the way products are sold, call for more detailed up-front information for consumers (allowing them to better compare prices and policy terms & conditions), separate out the sale of unemployment insurance from the loan offer, ban the sale of single premium policies (where the price of an annual policy is added onto the loan cost and interest charged on both), better handle complaints and encourage providers to reduce premiums and broaden their cover.
Over the years, we have been ahead of the pack, not only with our policies and premiums, but at recognising changes within this sector and commenting on the impact they will have on providers and consumers. Through a consistent media campaign, we ensure consumers are aware of the mis-selling issues and provide them with the tools to question and challenge credit providers.
Our ability to de-mystify the cover, premium and claims issues, plus consistent provision of case studies and low-cost quotes has resulted in Burgesses being one of the most-quoted unemployment insurance providers in the UK media today, appearing in the national and regional press, television and radio.
The firm has more third-party endorsements than any other provider and despite having been successful in lobbying for a change in selling practices, we do not rest on our laurels. We will continue to ‘name and shame’ companies that rip-off consumers and advise potential purchasers of what they should be looking for in a reputable provider.
Mindful that those without this cover are leaving themselves exposed to financial hardship if redundancy occurs, we are keen to instil confidence in this beleaguered sector and remind people to shop around for unemployment insurance and source more affordable cover from a standalone firm. In the majority of cases, independent providers offered superior policies at far more competitive premiums.
The news stories (known as press releases) in this section evidence how committed we are to regularly update consumers on the latest developments within the unemployment insurance sector and underlines our determination to secure a better deal for all.