BORROWER INSURANCE. From June 1, you can terminate your home loan insurance at any time. Until now, consumers had to wait for the anniversary date of their contract.
[Mise à jour du mercredi 01 juin 2022 à 09h12] It’s a change of size. Since June 1, a reform of borrower insurance allows in particular of terminate at any time, not on the anniversary date. In fact, this reform was adopted by Parliament last February and aims to liberalize the borrower insurance market. Here are the things to keep in mind:
- For the time being, the termination at any time is not concerned with the new contract, it ends on June 1, 2022.
- He will have to attend on September 1st because all contracts can be benefited.
- In fact, insurers will be required to inform borrowers each year of their entitlement and how it will be implemented. They will have a deadline of ten days to act a request for substitution, if accepted. Refusals must be justified.
- Another major measure: the Medical questionnaire is deleted for real estate loans of less than 200,000 euros per person (or 400,000 euros for a couple) and whose term expires before the 60th anniversary of the borrower.
In the case of a real estate purchase, the home loan insurance, also known as borrower insurance, corresponds to an insurance that allows the coverage of the repayment terms or the capital due of a credit remaining in case of a major event (death , total loss of autonomy, permanent disability, loss of employment …). If it is not mandatory, borrower insurance is often essential to obtain a real estate loan.
The lending institution “will almost always require the borrower to insure: against the risks of Death and Total and Irreversible Loss of Autonomy (PTIA) in case of rental investment; against the risks of Death, Total Loss and Irreversible Autonomy (PTIA), Disability and Incapacity for Work (ITT), or even Loss of Employment in the Event of Acquisition of a Primary Residence “, can be read on the Assurance Banque website Epargne Banque de France intelligence service.
The conditions in this change of borrower insurance have changed a lot in recent years. First, the Hamon Act made it possible for borrowers to terminate the lender’s insurance under an alternative contract offering the same guarantees at any time during the year following the credit signature, by means of a simple letter of termination, ideally with notice of receipt, addressed in recommendation to his insurer no later than 15 days before reaching the deadline of 12 months.
Then the legislature, through the law on transparency, anti-corruption and modernization of economic life of 2016, known as the Sapin 2 law, introduced a provision allowing the annual termination of borrower insurance on the anniversary date , but this measure was censored by the Conseil Constitutionnel. Meeting on January 17, 2017 in a joint joint committee, senators and deputies adopted the annual termination of borrower insurance (Bourquin amendment). Thus, for loan offers issued from February 22, 2017, the borrower may terminate the bank’s insurance even after the first year by means of a termination sent to his insurer no later than 15 days before the due date. but at least 2 months in advance, indicating the effective date of the new insurance contract accepted by the lending organization.
A provision that was to extend to all loan agreements from January 2018. But that was without counting the financial institutions that approached the Council of State in the summer of 2017, as well as the Constitutional Council. in order to obtain the cancellation of the extension to all contracts. Le Conseil Constitutionnel was, however, ruled on 12 January 2018 in favor of the annual termination of the borrower’s insurance, validating this possibility for all contracts. Since then, borrowers can, even after several years, carry out insurance delegation.
Place now in the 3rd stage care allowed the borrower to change insurance policy at any timeat no cost.
In theory, real estate loan insurance is not compulsory for the underwriting of a real estate loan, but in fact the lending institution may compel the borrower to take out one. Borrower insurance usually covers contingencies such as the death of the borrower or co-borrower, illness and disability, temporary or permanent, as a result of an accident, and loss of employment. .
The bank usually offers the borrower its own home loan insurance. However, he is free to choose another one if he finds the one of his bank too expensive and to proceed to what is called a insurance delegation. One condition, however, that the contract on which it finally launches its offer offers the same level of guarantee as that proposed by the lending establishment. It is important to be able to compare the different possibilities of insuring the asset and its.
As of October 1, 2015, banks are required to provide each borrower and co-borrower with a standardized form detailing the main features of the proposed borrower insurance, including the total cost of home loan insurance on the duration of the loan, expressed in euros, as well as the characteristics of the minimum guarantees required by the lender to obtain the latter. If the borrower takes out the insurance offered by the bank and later realizes that it is expensive compared to what the bank is proposing, the competition can change it. It is very important to choose an insurance borrower and compare the offers available: the cost of real estate loan insurance can in fact represent more than 30% of the total cost of the real estate loan.
The borrower is covered by the guarantees of the borrower’s insurance contract from the effective date written on it. It therefore marks the effective date of the contract, not the date on which the document was signed.
Be aware that real estate insurance rates may vary. They depend on the policy of the organization, but especially on the age and health of the borrowers and the risks covered.
The calculation of the cost of real estate loan insurance proposed by the lending institution is based on borrowed capital. The borrower’s insurance rate thus remains unchanged for the entire duration of the loan. To calculate the average monthly payments to be paid for real estate loan insurance, it is sufficient to multiply the rate of the borrower’s insurance by the borrowed capital and, finally, to divide by 12 the figure thus obtained.
Example: if the rate of the home loan insurance is 0.42% for a borrowed capital of 250,000 euros, the monthly repayable under the borrower insurance will be equal to 87.5 euros (250,000 € x 0 .42% / 12 = € 87.5). In the case of an insurance delegation, the calculation of the monthly payments to be paid, and therefore of the cost of the borrower’s insurance, is not based on the amount of capital borrowed but on the amount of capital remaining due.
Thus, the monthly payment is recalculated every year according to a depreciation table and its amount is degressive. To achieve a Calcutta Close to the reality of real estate insurance, the ideal is to use many simulators available on the Internet. Fill in the amount, duration and the duck of the loan, the computer offers you the the duck average insurance that you can change. In an instant, the simulator calculates the amount of the monthly payment with the details reimbursement of insurance.
Because the risks covered by home loan insurance are difficult to estimate, insurers overestimate the amount of insurance premiums, resulting in an increase in the cost of insurance and, ultimately, the total cost of the home loan. However, the law leaves it possible for borrowers to be reimbursed part of the insurance premium paid at the end of each year when the implementation of the guarantees provided for in the contract was not necessary. Not to mention that the insurance premiums are placed by the insurers and therefore they generate interest. The law provides that interest as well as proceeds are also restitués aux emprunteurs pour partie. The problem is that insurers pay back the money to the borrowers to the banks but do not redistribute it to the banks. We are talking about 40% of the amount of insurance premiums to be repaid to borrowers for real estate loans, or an average of 3,021 euros per person for loans taken out between 1996 and 2012.
A situation that prompted the UFC-Que Choisir to sue major French banks in 2007. In a decision on July 23, 2012, the Council of State ruled in favor of the association. However, I do not cite the passage expressed as borrower insurance as being eligible for reimbursement of insurance premiums to borrowers. Furthermore, it does not specify whether group death insurance policies are concerned. This leaves the field open for banks to interpret the 2012 decision in their favor. In practice, therefore, it is very difficult to perceive its due to take an individual action with its bank, which is why ActionCivile launched a class action lawsuit in 2014, which the Hamon Act made possible provided gather at least 100,000 complainants. The action in question amounted to more than double: 215,148.
On the other hand, at the end of his real estate loan, an insured can in theory apply repaying the benefits of your home loan insurance. There are three conditions for these requirements:
- Surplus insurance applications must not have been hired to reimburse monthly payments from the credit suite to a claim
- The loan must have been taken out between 1996 and 2005 for a home loan
- The request for reimbursement must be made in stock two years after the end of the mortgage.
To repay your borrower’s insurance, two means exist: intend an individual action or a collective action.
The use of a comparator On the Internet, such as Meilleurtaux, LeLynx, Magnolia or Lesfurets, can help you choose the most advantageous insurance. Certain simulation tools prevent the occurrence of disease or loss of employment, which, for example, is not necessarily interesting for officials.