The Halifax tried to tell me that I owed the portion of the MIG payout under subrogation to Royal and Sun Alliance. In their terms and conditions for the Mortgage, it DID state that I would be liable for any shortfall, which is why I bought the MIG.(posted 7740 days ago)Both Halifax and R&SA refused to supply copy of MIG, saying it was a block copy, but they did supply a copy of the terms (dated 9 months after I bought my MIG). It did not state in the terms that I would be liable for the payout.
I carefully read all the paperwork the Halifax had supplied me with, and could not find anything that stated *I* would be liable for MIG payout. I asked Halifax to send me any documents that substantiated their claim - they declined, saying they had no more paperwork that was relevant. However, they did get R&SA to write me a letter, saying they had given permission to chase the money (big deal).
This came back to them mis-selling the insurance. Either the policy was mis-sold by stating I would not be liable for shortfall, or Halifax and R&SA were doing a naughty by trying to make me pay a debt that I was not liable for.
I think each MIG should be taken on it's own merit, as it would appear that each case is possibly unique. I realise that the original question relates to the 6/12 year rule, but it would seem that it may not even be an issue in some cases as insurers have not worded their policies correctly.
Some years ago, I seem to remember hearing of a law that stated that if a person paid for an insurance, they could then not be liable under subrogation, as the person paying the premium is the INSURED PARTY. I have been led to believe that this is why lenders now make you take out an insurance for yourself before they will give a mortgage. Please correct me if I'm wrong.
Tracey