The purchase of real estate is often an important step in the life of individuals. A moment that marks a turning point and often a life goal, moving from the life of a tenant to that of an owner, free to dispose of his property. But the purchase spends most of the time through a mortgage to raise the necessary funds and borrower insurance is often essential. Find out all about home loan insurance and especially how to cancel it if it no longer suits you.
home loan insurance, What is that ?
Subscribing to a home loan commits the beneficiary for many years to repay the amount borrowed and its interest. Banks always ask for real guarantees to ensure that the sum will be recovered: a reasonable debt ratio, a lasting employment contract, an appropriate level of income… But a lasting situation can very well evolve over the years, in fact, no one is immune to a period of unemployment, death or any other event affecting the life and/or solvency of individuals.
Borrower insurance is then there to guarantee the repayment of the mortgage in the event of the occurrence of various events:
- the death of one of the subscribers,
- the total and irreversible loss of autonomy, making it impossible to receive any money, the subscriber must need help for at least three of the following activities: washing, dressing, eating or moving around,
- the total permanent disability of the borrower,
- total temporary incapacity for work preventing a salary,
- loss of employment, a guarantee that is often optional in mortgage loan insurance contracts.
The price of borrower insurance varies greatly depending on the daily activities of the subscriber, in particular, his general state of health or if he has already had risky operations, the practice of a profession or risky sports activities, the insured portion and the level of guarantees but also and above all the nature and amount of the real estate purchase project.
Is it possible to terminate your borrower insurance?
In recent years, borrowers have had more freedom in taking out their mortgage loan insurance. First of all, at the time of subscription, they are now free to choose their own insurance policy and no longer the organization selected by the banking institution offering the loan.
In addition, the Hamon law of 2014 allows the subscriber to change loan insurance from the first year and at any time by making a delegation request to the bank before the last fortnight preceding the anniversary date of the subscription of your loan.
The Bourquin amendment dated 2017 allows you to terminate and change borrower insurance every year by giving 2 months notice before the anniversary date of your subscription. The only condition for termination is that the level of cover of the new insurance taken out be at least equal to that which you had.
The procedure for termination
It is the Bourquin law or Sapin 2 law which entered into force on February 22, 2017 and applicable since January 1, 2018 which sets the conditions for the termination and subscription of mortgage loan insurance. We then speak of insurance substitution, in fact a banking establishment will not accept to leave you without reimbursement guarantee insurance but you can find a new insurance that is more advantageous for you.
To change your insurance policy, you will need to send a substitution request to your bank with a delegation of benefits, a membership certificate and the general conditions of your new insurance. Thereafter, under article L312-9 of the consumer code, your bank will have to give its agreement and provide you with an amendment.
You will then have to continue the process by sending your cancellation letter to your former insurer, at the latest 2 months before the expiry of your contract. The insurer then has 10 days to give you its agreement to the visas of article 113-12-2 of the Insurance Code.
A fairly long and meticulous process that must be fully respected to assert your rights. In writing your various letters, each word has its importance and the list of documents to be provided is very precise. To be certain of winning your case, do not hesitate to accompany you with the expert teams of https://www.justice-express.com/, an online service that will take care of writing your letters and sending it to the people concerned in just a few clicks. It is a site that will take care of everything, entrusting your file to lawyers for the termination of your borrower insurance.
A simple and effective way to assert your rights without wasting precious time researching and/or requesting additional documents, at the heart of a very timed procedure.
Read also: The steps to prepare to take out a mortgage