Real estate credit: how to change insurance to save money?

Changing the insurance that covers your loan can also be beneficial.
Changing the insurance that covers your loan can also be beneficial. (©Nenetus –

Favorable interest rates prompted you to renegotiate your mortgage? Change insurance which covers your loan can also be beneficial.

This operation is now common practice for save money. Over time, your borrower insurance has probably become less attractive than others, in terms of prices and guarantees.

What is borrower insurance for?

This insurance covers in particular the risks of death and disability of the subscriber. About 7 million French households have taken out borrower insurance for their mortgage.

This market is 88% owned by banks, because insurance is often imposed by the bank when taking out the mortgage.

When to change insurance?

Despite low borrowing rates, the cost of such insurance remains significant. But know that you are completely free to replace it, throughout your refund, like any insurance.

The Hamon law allows you to change borrower insurance to the contract of your choice, at any time during the first year of the loan.

You also have the option of doing so on each anniversary date of the contract, subject to 2 months’ notice thanks to the Bourquin amendment (Article L113-12 of the Insurance Code.)

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But the big change is the – recent – ​​possibility of termination at any timesupported by the Patricia Lemoine bill (Agir group).

This “borrower insurance” bill was unanimously adopted by the Senate on Thursday, February 17, 2022. It will be implemented in June for new insurance contracts and in September for current contracts.

Optimize your monthly payments

The insurance comparator estimates that external borrower insurance contracts are between two and four times less expensive than bank contracts. The estimated savings made would be €5,000 to €15,000 on average, per borrower, over the duration of the loan.

Beyond the cost, changing insurance will encourage you to refine your guarantees. Some insurance companies offer you equivalence certificates by offering you coverage that includes your basic guarantees with other guarantees or extended guarantees.

Choose your borrower insurance when taking out the loan

Since 2010, the Lagarde law allows free competition when taking out your loan. “Until the signature by the borrower of the loan offer, the lender cannot refuse another insurance contract as collateral if this contract presents a level of guarantee equivalent to the group insurance contract that ‘he proposes’ (article L313-30 of the Consumer Code.)

Before submitting to your bank the possibility of choosing another offer for the insurance of your loan, think about negotiate your credit rateyour prepayment indemnities and any other special conditions related to the characteristics of your loan.

APEI-News. Caroline Canault

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