It is in 2018 that senator has given rise to an amendment that allows the borrower to make a change of mortgage insurance, this year, to set up a more advantageous contract for him. However, due to a lack of information, the complexity of the insurance change procedures, as well as the bad faith shown by the financial institutions, few borrowers finally benefit from this annual right of cancellation. As a result, recently, the senator has issued another bill with the aim of completing this amendment.
In 2017, 4 out of 5 loan insurance contracts were group insurance
loan insurance contracts were group insurance” />
In 2010, the Lagarde law was the first law in favor of borrowers, allowing them to freely choose their loan insurance. A few years later, it was the Hamon law that came in, offering borrowers the possibility of canceling their loan insurance during the first 12 months of repayment of the loan in order to buy a new one that is cheaper or cheaper. better adapted.
Since January 2018, the amendment has also strengthened the right of borrowers by allowing them to compete and terminate their loan insurance contract each year, at the time of the anniversary date of signing the contract provided that the principle of equivalence of guarantees is properly respected.
Although legislation has actually changed in recent years in favor of borrowers, the monopoly held by banks still persists to 87.5%. In practice, the financial organizations systematically present their group insurance contract to the loan applicants, along with the issuance of the credit offer. Most often, this offer is put in place for ease or for fear of delaying the release of funds because of the choice of a “delegation of insurance” by the borrower, which is the use of another insurer to to pay less and/or to be better covered. And, later, when repaying the mortgage, few are the borrowers to decide to change insurance offer, while they can, for many of them, achieve significant savings.
30% of banks do not provide any response to their clients issuing a loan cancellation request. And others are blurry on the anniversary date or prolong the procedure…
New law: sanctions provided for any bank not well intentioned
It is estimated by that, since the implementation of the amendment, the global amount returned to the borrowers who have played the competition amounts to 30 million euros. And some of them would have even saved up to 14,000 € on the total amount of their mortgage. The senator assesses to 3 billion euros the share that can be returned to the borrowers, in the case of the good respect of free competition.
On April 3, issued a bill to force banks and insurance companies to adapt to the law. The goal is to clarify the concept of anniversary date, which is very important for the cancellation request to be applied. According to insurance stakeholders, this date is supposed to become that of the signature by the borrower of the offer of credit.
Also, the senator advises to sanction by a fine of 1,500 € any professional refusing to indicate this date to his customer as well as to remind him annually. It recommends to officially publish the list of banks not respecting this point and to publish at the same time their sanctions, this measure being dissuasive.