Thanks to the Lemoine law, it is possible for new contracts to terminate your mortgage loan insurance at any time from 1uh June. A measure that is part of a reform aimed at promoting fairer and more transparent access to borrower insurance.
Liberalization of the loan insurance market
After the Lagarde law, which authorizes borrowers to take out borrower insurance other than that of the lending bank, the Hamon law, which allows insurance to be changed during the first 12 months of the loan and the Bourquin law, which has the extended right to termination every year on each anniversary date of the credit agreement, parliamentarians voted, in a joint committee, on a new reform of borrower insurance. This last authorization the change of borrower insurance at any time and free of charge. The delivery of loan insurance, of which 88% of the market still belongs to the banks, seems, this time, well and truly underway.
Infra-annual termination possible from 1uh June
The new mortgage loan insurance contracts can be canceled at any time since 1uh June. Postponed several times, the possibility of terminating your borrower insurance at any time finally materializes. After the new contracts, the measure will be extended to all contracts already in progress, from 1uh September. Being able to put establishments in competition at any time should make it possible to facilitate the search for the cheapest borrower insurance.
Borrower insurance costs that could increase
However, according to insurers, the Lemoine law could have the opposite effect. Indeed, it is possible that the rates range from 15 to 40% depending on the insurers. In question ? The measure that ends the health questionnaire if the following conditions are met:
- If the insured part of the accumulated outstanding loans is less than €200,000 per insured;
- If the loan repayment deadline occurs before the insured person turns 60.
These new rules are intended to facilitate access to borrowers as more at risk. A definite step forward that makes the borrower insurance market accessible to profiles that were previously uninsurable.
However, in the absence of a health questionnaire, the possible response from insurers could therefore be risk pooling which is the basic principle of bank group insurance. Individual insurers would in fact see constraints in spreading the cost of risk to other borrowers. From then on, the borrower would no longer have the possibility of subscribing to a tailor-made contract at a competitive price. Another possible response from insurers, no longer offer coverage to profiles eligible for the Lemoine law.
In any case, the use of a mortgage insurance broker is all the more recommended today. This expert directs the borrower to the organization that accepts the best rate from the insurer while respecting the criteria of equivalence of guarantees.
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