A World First, Borrowers Mortgage Insurance (BMI)
Borrowers Q & A
Section A - The Basics
Q1. What is BMI?
A: Borrowers Mortgage Insurance (BMI) is an insurance policy that sits alongside your home loan. Unlike traditional Lenders Mortgage Insurance, BMI is designed to protect you, the borrower, as well as your lender. If you lose your job or become seriously ill, BMI can cover up to six months of your mortgage repayments and if a claim is ever paid out on the policy, the insurer cannot come after you personally to recover that money.
Q2. What is LMHI?
A: Lenders Monitored Home Insurance (LMHI) is house and contents insurance for your property, paid periodically alongside BMI. It works like standard home insurance, but because MIG administers your payments directly, your lender can see for the first time whether your home insurance is current, which helps you stay on the right side of the insurance requirement in your loan contract.
Q3. Do I have to take out BMI and LMHI, or is it optional?
A: This depends on your lender and your loan. Some lenders may offer BMI as an optional product, particularly if it allows you to buy with a smaller deposit or access a better rate; home insurance itself (which LMHI provides) is typically a mandatory requirement of your loan contract regardless of which insurer you use. Your lender or broker will confirm what applies to your specific loan.
Q4. Why would I want BMI if my lender already requires some form of mortgage insurance?
A: If your loan requires Lenders Mortgage Insurance (LMI), that policy protects your lender only you receive no benefit from it even though you pay the premium, and if a claim is paid, the insurer can pursue you for the shortfall. BMI is different: it is designed so you, the borrower, are covered too, with no such recovery action against you.
Q5. Is BMI the same as Lenders Mortgage Insurance (LMI)?
No. See the comparison below BMI is built to also protect you, not just your lender.
Lenders Mortgage Insurance (LMI)
Borrowers Mortgage Insurance (BMI)
Protects the lender only you get no direct benefit
Protects you and your lender
Only your lender can make a claim
You can make a claim yourself
If a claim is paid, the insurer can pursue you for the amount
No recovery action against you if a claim is paid
No repayment assistance if you lose your job or get sick
Up to 6 months of mortgage repayments covered for unemployment or illness
Cost is typically 5%+ of your loan amount, paid upfront
Cost is circa 2% of your loan amount
Q6. What if I already have home insurance with someone else — do I still need LMHI?
A: If your loan requires you to maintain home insurance and you already have a policy that meets your lender's requirements, you may not need to also take out LMHI check with your lender or broker about exactly what satisfies your loan covenant. LMHI is offered as a convenient, bundled option alongside BMI, not a mandatory replacement for an existing adequate policy, unless your lender.
Section B - What BMI Covers
Q7. What happens if I lose my job or get sick and can't make my repayments?
A: If you experience a qualifying unemployment or health/incapacity event, BMI's repayment assistance cover pays your scheduled mortgage repayments directly to your lender for up to six months, subject to a qualifying waiting period, so you have breathing room to get back on your feet without falling behind on your loan.
Q8. How much cover do I get, and for how long?
A: BMI provides up to six months of scheduled mortgage repayments for a qualifying unemployment or health/incapacity event. Full terms, waiting periods and the claims process are set out in the Product Disclosure Statement (PDS) issued when the product formally launches.
Q9. Is there a waiting period before I can claim?
A: Yes as with most insurance products, a qualifying waiting period applies before a repayment assistance claim can be made. The exact waiting period will be confirmed in the PDS.
Q10. What isn't covered by BMI?
A: BMI, like any insurance policy, has exclusions for example, events you were already aware of before taking out the policy, or voluntary unemployment. A full exclusions schedule will be set out in the PDS once the product is finalised. If a specific scenario matters to you, please ask us directly before relying on the policy.
Q11. Does BMI replace or affect my rights under financial hardship rules?
A: No. BMI works alongside not instead of your existing rights to request hardship assistance from your lender under the National Consumer Credit Protection Act 2010. Taking out BMI does not reduce or replace those statutory rights.
Q12. What happens to my BMI cover if interest rates change or my repayments change?
A: Your BMI repayment assistance benefit relates to your scheduled repayments under your loan at the time a qualifying event occurs. If your repayments change for example, following an interest rate movement or a loan variation your premium and benefit amount may be reviewed. Full details will be set out in your PDS and policy schedule.
Section C - Cost & Payment
Q13. How much does BMI cost?
A: Indicative pricing for BMI is circa 2% of your loan amount significantly less than typical LMI premiums, which run to 5% or more of the loan amount. Your exact premium will depend on your loan size, LVR and individual circumstances, and will be confirmed at the time of your application.
Q14. How do I pay for BMI?
A: If your loan-to-value ratio (LVR) is 80% or less, BMI premiums can be paid monthly in advance. If your LVR is above 80%, the first 12 months of premium are paid upfront, then monthly in advance after that.
Q15. What if my LVR is above 80%?
A: For loans above 80% LVR, the first year of BMI premium is paid upfront at settlement. Some lenders may allow this amount to be capitalised into your loan ask your lender or broker whether this option is available to you, noting it will increase your loan balance and repayments.
Q16. Can the cost of BMI be added to my loan?
A: For loans above 80% LVR, the first 12 months' premium may, at your lender's discretion, be capitalised into your loan amount rather than paid as a separate upfront cost. This increases your total loan balance and repayments, so it's worth discussing with your broker or lender which option suits you best.
Q17. Will I pay a lower interest rate if I take out BMI?
A: Possibly this is a decision made by your individual lender, not by MIG. Because BMI reduces risk on your loan, some lenders may choose to offer a discounted rate to borrowers who voluntarily take BMI. Ask your lender or broker whether this applies to your loan.
Section D LMHI - Your Home Insurance
Q18. What is Lenders Monitored Home Insurance and why does my lender need to know about it?
A: Your loan contract almost certainly requires you to keep your home insured for the life of the loan this protects the property that secures your mortgage. LMHI is a genuine house and contents policy that meets this requirement, administered by MIG alongside your BMI payments.
Q19. Is my lender "watching" me what exactly do they see?
A: Your lender receives confirmation of whether your LMHI policy is current or has lapsed the same basic information they're already entitled to under your loan contract, just kept up to date automatically rather than checked once at settlement. They do not see the details of your claims history, your finances, or anything beyond your insurance status. This is designed to protect you as much as your lender it means a lapse gets caught and addressed early, rather than leaving your home (and your loan) uninsured without anyone noticing.
Q20. What does LMHI cost and how do I pay?
A: LMHI is competitively priced and paid monthly in advance, in the same way as BMI. Our payment system will send you reminders ahead of each payment so you don't miss a due date.
Q21. What happens if I miss a payment or let my policy lapse?
A: Our payment system will remind you of upcoming payments, and if a payment is missed, it will flag this so it can be addressed quickly protecting both your cover and your standing with your lender. Continuing to miss payments could result in your policy lapsing, so it's important to respond to reminders and get in touch with us if you're having difficulty paying.
Q22. Does LMHI cover my contents as well as the building?
A: LMHI is a bundled house and contents policy, so both your home and your contents can be covered. Specific coverage levels and options will be set out in your policy schedule and PDS.
Section E - Making a Claim
Q23. How do I make a claim?
A: A dedicated claims process will be set out in your PDS once BMI and LMHI formally launch, including how to notify us, what information is needed, and expected timeframes. In the meantime, if you have an urgent question about a specific circumstance, please contact us directly.
Q24. Who can make a claim me or my lender?
A: Under BMI, both you (as the insured borrower) and your lender have rights to claim, reflecting the fact that BMI is a co-insurance structure designed to benefit you both unlike LMI, where only the lender can claim.
Q25. Will the insurer come after me for money if a claim is paid?
A: No. BMI is a non-recourse policy. If a claim is paid including a shortfall claim following a default the insurer has no right to recover that amount from you personally. This is one of the key differences between BMI and traditional LMI.
Q26. How long does a claim take?
A: Claims timeframes will be confirmed in the PDS once the product launches and the underwriting arrangements are finalised. We understand that speed matters most when you're already dealing with job loss or illness, and MIG's claims process is being designed with that in mind.
Section F Talking to Us - Phone, Chat & AI Assistance
MIG is evaluating an AI phone and chat assistant to help answer everyday questions quickly, any time of day. This service is still being tested and is not yet live the questions below describe how it's intended to work.
Q27. Will I speak to a real person when I call MIG, or a robot?
A: For many everyday questions like checking a payment date, confirming your certificate of currency, or updating your details you may be assisted by an AI voice assistant that can answer immediately, 24 hours a day, without being placed on hold. For anything involving a claim, hardship, or a complaint, or if you simply ask to speak with a person, you'll be connected to a MIG team member.
Q28. What is the AI phone assistant, and why would MIG use one?
A: MIG is evaluating (but has not yet finalised) an AI-powered phone and chat assistant to answer everyday questions quickly, any time of day or night, rather than making you wait on hold during business hours. It's designed to handle simple, routine requests and hand more complex or sensitive conversations straight to a person.
Q29. Can I ask the AI assistant to make a claim for me?
A: No. Claims, hardship requests, and anything sensitive are designed to be passed straight to a MIG staff member the AI assistant is not intended to make claims decisions or handle hardship conversations on its own.
Q30. What if I don't want to talk to an AI assistant at all?
A: You can ask to speak to a person at any time and your call will be transferred to a MIG team member.
Q31. Is it safe to give my personal details to an AI phone assistant?
A: Any AI platform MIG uses is being assessed against the same privacy standards that apply to the rest of our business, including the Australian Privacy Act 1988. Where a vendor is based overseas, additional safeguards are required before it can be used with your personal information, and our Privacy Policy will be updated to explain exactly how your information is handled before this goes live [pending].
Q32. Is my call recorded, and what happens to the recording?
A: As with most contact centres, calls whether handled by a person or an AI assistant may be recorded or transcribed for quality, training and record-keeping purposes. The storage location and how long recordings are kept will be set out in our Privacy Policy before any AI-handled calls go live.
Q33. Can the AI assistant call me, rather than the other way around?
A: Yes this is intended to be used for helpful reminders, such as an upcoming BMI or LMHI payment, or a prompt if a payment has been missed, so small issues don't turn into bigger ones (like a lapsed policy).
Q34. Does the AI assistant understand accents or languages other than English?
A: The platform MIG is evaluating supports a very wide range of languages, which we hope will make it easier for customers who don't speak English as a first language to get help. This will be confirmed as the platform is configured for use.
Q35. What if the AI assistant gets something wrong or can't help me?
A: If the assistant can't resolve your question, or gives you an answer you're not sure about, simply ask to speak to a person and your call will be passed to a MIG team member.
Q36. Will using an AI assistant slow down help with a genuine problem?
A: The intention is the opposite having routine questions handled by an AI assistant is designed to free up MIG's human team to spend more time, and move faster, on claims, hardship and anything complex, rather than routine administrative queries.
Section G - Eligibility Your Rights & Getting in Touch
Q37. Am I eligible for BMI?
A: Eligibility depends on your loan, lender and personal circumstances, and will be confirmed as part of your application. BMI is designed to be available across a broad range of LVRs, not just above the traditional 80% LMI threshold so it's worth asking your lender or broker whether it's available to you regardless of your deposit size.
Q38. Can I cancel BMI if I change my mind?
A: Yes standard consumer protections under the Insurance Contracts Act 1984, including a cooling-off period, will apply to BMI and LMHI. Exact cooling-off terms will be set out in your PDS.
Q39. What happens if I refinance or sell my home?
A: Portability and cancellation provisions for BMI and LMHI on refinance or sale will be set out in the PDS. As a general principle, insurance tied to a specific loan typically ends when that loan is repaid or refinanced away from the covered facility please check your policy schedule for the specifics that apply to you.
Q40. Who do I complain to if I'm unhappy with my policy or a claim decision?
A: Once BMI and LMHI formally launch, you will have access to MIG's internal dispute resolution process and, if unresolved, the ability to escalate to the Australian Financial Complaints Authority (AFCA) the independent external dispute resolution scheme for financial services in Australia. This applies whether your query was handled by a person or by the AI assistant described in Section F. Full contact details will be provided in your PDS and Financial Services Guide.
Q41. Is my personal information safe?
A: Yes. MIG is required to handle your personal information in accordance with the Australian Privacy Act 1988 and the Australian Privacy Principles, including specific protections around information sent overseas relevant both to our insurance partners and to any technology vendor, such as our AI phone assistant, that may process your call. A full Privacy Policy is available at borrowersmortgageinsurance.com.au/privacy-policy.
Q42. Who is the insurer, and who regulates BMI?
A: MIG is working to finalise its underwriting arrangements, with Lloyd's of London accessed via an Australian coverholder arrangement as the preferred pathway; this is not yet formally confirmed [pending]. MIG is also progressing its Australian Financial Services Licence (AFSL) pathway, initially operating as an Authorised Representative under an arranged AFSL ahead of holding its own licence [pending]. The underwriter, AFSL/Authorised Representative details and AFCA membership number will all be clearly disclosed in the PDS and Financial Services Guide provided before you take out a policy.