how to save money with borrower insurance that can be canceled at any time

Matthieu Robin, project manager for banking and insurance at the UFC-Que Choisir association, is happy: “It’s a great victory for which we have been fighting for fifteen years! » He is delighted with the vote on the Lemoine law on February 17.

From now on, borrowers will be able to terminate their home loan insurance at any time, covering them against death, loss of autonomy, disability and incapacity for work. This means that they can more easily change insurance in order to optimize the price and the guarantees.

Nothing new in principle: it was already possible to terminate your contract during the first year of the loan, as well as each year on its anniversary date. The Lemoine law will make life easier for borrowers because, until now, the banks put a spoke in their wheels when they tried to change insurance”, says Astrid Cousin, spokesperson for the online broker specialist in Magnolia loan insurance.

These practices were intended to miss the mark of the anniversary date. From 1er June for new loans and from 1er September for current contracts, everything will be simpler.

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To the great benefit of consumers, because the borrower insurance offered by the bank granting the credit is particularly expensive. These “group contracts” cost between 0.30% and 0.40%, compared to 0.10% to 0.20% for individual contracts offered by insurance companies. However, three-quarters (74.5% precisely) of creditor insurance sales were group contracts in 2019, according to the Financial Sector Advisory Committee (CCSF).

Colossal reserve of purchasing power

“We estimate that 550 million euros could be saved if all households with group loan insurance decided to terminate it in favor of an individual contract in delegation [souscrit auprès d’un autre établissement que le prêteur] », calculates Matthieu Robin, at UFC-Que Choisir. A colossal reserve of purchasing power.

The potential gain is all the more important as the borrower is young. “Insurance delegation makes it possible on average to divide the cost by three at 30 years and by two at 40 years”, believes Astrid Cousin, at Magnolia. The saving therefore amounts to thousands of euros on the scale of the total cost of credit.

A 37-year-old borrower will be offered 0.37% insurance by his bank for a loan of 180,000 euros over twenty years, or 56 euros per month, for a total cost of insurance of 13,320 euros. But he could obtain individual insurance at 0.09%, or 14 euros per month, for a total cost of 3,240 euros, according to the online comparator Reassure me. “Our customers save between 8,000 and 10,000 euros on average when they opt for external insurance when taking out their mortgage », pleads Delphine Bardou, marketing director of Réassurez-moi.

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