2023-06-06 08:47:36
At a time when budgets are increasingly tight, there is a still little-known way to make valuable financial savings: change the borrower insurance on your mortgage.
According to a report by the Financial Sector Advisory Committee (CCSF), 88% of these contracts were indeed held by banks in 2020. However, multiple alternative offers make it possible to lower the bill.
And, good news, you have recently had total freedom to compete!
Cancel at any time
The borrower insurance market is estimated at nearly 8 billion euros in annual premiums. It must be said that this coverage used to guarantee the payment of monthly mortgage payments in the event of death, disability, or even loss of employment, can be particularly expensive.
This is all the more true as this financial windfall essentially benefits banking establishments which enjoy a privileged position since they have this insurance coverage taken out when the loan is granted.
After several unsuccessful legislative attempts to introduce more competition, the Lemoine law of February 28, 2022, however, reshuffled the cards. Since September 1, 2022, the date of its full entry into force, all users have the right to terminate their borrower insurance contract at any time, as soon as it is signed.
€10,000 savings
This measure is a victory for alternative insurers who are now working to publicize it, like the insurance broker April which launched a communication campaign on this new right in March in order to raise awareness among the general public.
“For us, the battle is won, but consumers must be informed because many do not know the Lemoine law”, explains Eric Maumy, the group’s president. At the end of the day, the CEO assures him, “the delegation of borrower insurance is an effective way to make real savings”.
Already in 2020, a study of the Securimut broker (subsidiary of Macif), estimated that it was possible to save an average of €10,000 by switching from a so-called “group” contract (those offered by the banks) to an alternative offer.
The figure is now put forward by theApcade (the Association for the promotion of competition in creditor insurance), a lobby created in 2021 by the main alternative players, including Macif and April, in order to obtain this right to infra-annual termination.
The president of the association thus noted at the end of February “a saving ranging from 5,000 to 25,000 € and sometimes much more on large capital, with an average around 10,000 €” for households having effectively changed contract since September.
While the Apcade noted “a significant wave of changes in borrower insurance” since the law came into force, Eric Maumy has also perceived this growth: “70% of our business volume today concerns the takeover of current contracts, compared to 40% before the Lemoine law. »
The instructions
Do you want to take the plunge? Make several quotes to find an alternative insurer who will not only offer you a better rate but also protection that is just as effective, or even superior.
The law also requires that the new contract offer guarantees at least equivalent to those which they replace. If it is then possible to formulate a request for termination by mail, the procedure must respect a certain formalism, under penalty of refusal. Better to rely on a professional!
According to Eric Maumy, “a good number of alternative insurers take care of the procedure of termination and recovery from the bank, but not all of them”. It must therefore be determined before committing or turning to a specialized intermediary such as a broker or a general insurance agent who will accompany you in this process.
Once the bank has agreed on the guarantees, it has 10 days to send back an amending amendment to the loan contract, which specifies in particular the new annual percentage rate of charge (APR).
But if “most banking groups are playing the game”, some big players are still resisting. So much so that out of 10,000 files analyzed, April estimates the response time at 28 days on average in April.
Questioned by us, the French Banking Federation indicates “not to be aware of any malfunctions to date” and is awaiting the publication of the report of the Financial Sector Advisory Committee, scheduled for the end of 2023, on the consequences of the application of the Lemoine law.
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