Loan Insurance: annual termination open to all in 2018
All persons who have taken out a mortgage loan will be able to change borrower insurance every year on the anniversary date of the contract.
Borrower Insurance: What’s Changing in 2018
From 1 January 2018, all persons who have subscribed to a mortgage will be able to change borrower insurance every year on the anniversary date of the contract. And save money. Explanations.
The Bourquin amendment in the Sapin 2 law which provides for an annual cancellation right for all home loan insurance contracts will come into effect at the beginning of the year 2018. The key to thousands of euros in savings for the borrowers.
In practice, a person who applies for or has subscribed to a home loan may change the contract every year on the anniversary date of his or her subscription (date of contract signature) if he / she is offered a lower rate elsewhere. Until now the Hamon Law authorized this delegation of insurance only the first year following the application for credit if the loan was contracted after March 1, 2017. But the situation will change and this advantage will expand: It is necessary therefore compete and negotiate well.
How to change my loan insurance?
You must start building your file two to three months before the anniversary date of the contract. You have to look for offers, go through dedicated websites like Assurgo.fr. Once the establishment and the offer found, you will then have to write a registered letter to your bank two months before the anniversary date of your contract to inform him of your decision to terminate your credit insurance. From the reception of the mail, the banking organization has 10 days to study your request and make a decision. If it accepts, an amendment to the contract will be established free of charge. If she refuses the request of the borrower, she will have to justify in writing this motivation.
Conditions to respect for your new contract
Be careful, however … The terms and conditions of your new contract must be equivalent to those of the original contract, otherwise, the bank will be entitled to refuse the change. The rider fees in the event of a change of insurance are prohibited by the Hamon law, on pain of a fine of 3,000 euros.
The banks want to repeal this law that would make them lose a lot of money. They seized the constitutional council on October 11th. The council has three months to consider this request: we will know on January 11 if this provision of the law is validated, postponed or canceled.
According to the French Insurance Federation, the total sum of contributions resulting from loan agreements amounts to 8.8 billion euros in 2016. 88% of real estate loans are insured by the banks (group contract). The borrower insurance can represent up to 40% of the total cost of a loan.