Borrower Insurance: Understand grace and deductible time limits


Franchise and care periods are often confusing for borrowers (Photo credits: Unsplash – Tierra Mallorca)

Borrower insurance combined with a home loan is intended to take over the repayment of tracts in the event of the borrower’s default. However, this coverage is not immediately active, depending on the terms of care and the deductible associated with the guarantees provided for in the contract.

What is a grace period?

When you apply for real estate insurance, you are not immediately in the event of a claim. On the day of signing, a waiting period actually starts and you are only covered for claims (illnesses, accidents, etc.) that occur beyond that.

For example, if the insurance contract has received a six-month grace period for the guarantee. is not supported.

Good to know: The grace period usually varies from one to twelve months, depending on the contract, but also the guarantees you subscribe to.

What’s the difference with a franchise?

Like the grace period, the deductible period is a period of time where you are not compensated, moreover the starting point of the deductible period started when the accident occurred.

Let’s take the example of the Total Temporary Disability (ITT) guarantee:

If your accident occurs after twelve months, the waiting period will no longer be taken into account.

On the other hand, if you have a 90-day franchise agreement, the borrower’s insurance will not charge a real estate loan repayment on the 91st day after the accident.

A big issue for the borrower

If it is seldom possible to negotiate with the insurance company a change in the grace period or the deductible period, this element may vary from one insurer to another, hence the importance of carefully reading the conditions. provided for in the contract and compare the offers made to you.

Depending on your profile, you can choose the series of the collection contract or the individual real estate insurance contract best suited to your needs.

As a reminder, the individual contract is built according to your profile, while a collective agreement such as the real estate loan insurance offered by Boursorama to its customers is based on the principle of risk sharing between all policyholders.

St├ęphanne Coignard ([email protected])

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