An opening to competition that is gaining momentum in 2018
When signing a mortgage, the borrower is obliged to take out parallel borrower insurance that will cover the repayment of the credit in the event of death, disability or temporary incapacity for work.
Despite the possibility of changing insurers under the Hamon law, in force since July 2014, until one year after the signature of the loan, insurance practices have changed little.Nearly 9 out of 10 French subscribe to the group insurance of the banking establishment from which they borrow their mortgage *
However, since 1st January 2018, borrowers have now the possibility to cancel their insurance every year, on the anniversary date of the signing of their credit and for all loans in progress, with no limit of seniority and duration (adoption of the Bourquin amendment).
Terminating your insurance: a significant advantage for borrowers
With this new option, individuals can compete to find a better deal. Indeed, insurance weighs heavily in the overall cost of credit (30% on average). Renegotiating insurance through competition or subscribing to a specialized insurer, in most cases allows for significant savings.
This opening to competition favored by the legislation aims to boost the real estate market by strengthening the purchasing power of people.50% decrease for 25-35 year olds and between 20-30% for 35-45 year olds when the bank's group insurance is terminated in favor of individual insurance *
The steps to follow to terminate your insurance
To cancel your insurance, you must send a request for cancellation by registered letter with acknowledgment of receipt no later than 2 months before the anniversary date of the signature of the loan. You must also submit with this letter the new insurance to which you wish to subscribe, and which must offer guarantees equivalent to those of your bank. The bank will then study your file and give you an answer : in case of refusal, it must justify its decision.
To find a specialized insurer, you can go through the many insurance comparison sites to find the best offer according to your profile. Do not hesitate to ask real estate professionals who will guide you according to your needs.
* Figures: Meilleurtaux.com