Essential for obtaining a mortgage, borrower insurance, however, generates costs that are among the highest in the total cost of credit. Fortunately, thanks to various legal provisions, it is now possible to change loan insurance to make significant savings on this item.
But when should this be done? What are the steps to follow ?
When to change loan insurance?
When signing the credit agreement with your bank, you have the option of refuse the proposed insurance and take out another borrower insurance. In banking jargon, we speak of delegation of loan insurance.
To do this, all you have to do is find an offer that includes at least guarantees equivalent to those included in the fleet formula offered by the bank.
But that’s not all ! Several legal provisions have been passed in recent years to allow consumers to change loan insurance, even after signing. On this basis, here are some tips for changing borrower insurance.
Change loan insurance every 12 months
The Hamon Law gives the borrower the possibility of changing borrower insurance at year 1 from the date of signature of his loan. The equivalence of guarantees remains the only condition to be respected.
Change credit insurance on each anniversary date
This development was introduced by the Bourquin Law in 2017. Since then, borrowers have the possibility of subscribe to a new loan insurance offer on each anniversary date of their contract.
In addition to the guarantee requirements, compliance with a deadline of at least two months before the new annual due date is imposed.
Change borrower insurance at any time
Finally, thanks to the Lemoine Law adopted in 2022, it is now possible to cancel your credit insurance at any time to subscribe to a more advantageous offer.
This measure is applicable for contracts signed from 1er June 2022. For loans taken out before this date, it will be valid from 1er September 2022.
How to find better credit insurance?
With the multitude of credit insurance offers available on the market today, it’s easy to get lost. Indeed, several technical aspects, such as the equivalence of guarantees, the quota, and the deductible come into play.
So, to find advantageous borrower insurance, two solutions are available to you:
Hire an insurance broker
The insurance broker is a professional who searches, on behalf of his clients, for the best credit insurance offers. He is independent of insurance companies and receives compensation only when the contract is signed between the borrower and the insurance. He also offers advice to the borrower on all matters related to his insurance contract.
Use an online comparator
That is sure the best way to quickly find advantageous borrower insurance. Simply fill in the information on the minimum guarantees and your insured profile to access the best offers.
Then you can compare them and choose the one that suits you best. This saves you from going around to several companies to request and compare quotes.
In addition, some insurers offer online subscription. You can therefore carry out all the formalities directly from your computer or smartphone.
What are the steps to follow for the change of credit insurance?
Once you have found new loan insurance, submit a termination request to your bank by registered letter with acknowledgment of receipt. Attach a copy of the replacement contract. The bank has an obligation to respond to you within 10 working days.
If she refuses your request, she has the obligation to justify herself.
If your request is accepted, a new amendment will be added to your contract. This will specify in particular the new overall effective rate of your credit. Note that the fact of changing loan insurance is totally free. The bank does not have the right to charge you analysis, modification or delegation fees.