Since June 1, 2022, the Lemoine law allows individuals to cancel at any time borrower insurance contracts linked to newly taken out mortgages. Households have strongly mobilized this new right, with some companies observing a 70% increase in substitution requests between September and January 2022 compared to the same period a year earlier.
The new role of competition
Banks still held 88% of these contracts in 2020 according to the Financial Sector Advisory Committee. However, many alternative offers are available on the market and can lower the bill. The total freedom granted to consumers to bring competition into play thus presents a real potential for financial savings.
How to change borrower insurance?
Borrower insurance is not a contract set in stone for the duration of the loan. Here are the different steps to change borrower insurance:
- Study his current contract: it is necessary to take note of the conditions of termination and substitution of its current borrower insurance contract.
- Compare offers: it is advisable to compare the different loan insurance offers available on the market according to the guarantees, prices and subscription conditions.
- Take out new insurance: after choosing the offer best suited to your needs, you must take out the new borrower insurance contract.
- Cancel your current contract: once the new contract has been signed, it is necessary to inform the lending institution and send a request for termination of the current contract, respecting the methods indicated in the general conditions.
The potential benefits of changing borrower insurance
Changing borrower insurance can have several advantages:
- Savings: delegated contracts generally offer more competitive rates than those offered by banks, thus reducing monthly payments and the total cost of insurance.
- Adapt your cover: a new contract can offer guarantees that are better suited to the current needs of the borrower, in particular in the event of a change in his personal or professional situation.
- Improve your profile: with a lower annual percentage rate (APR), the borrower has the possibility of renegotiating his mortgage and increasing his borrowing capacity.
The case of French metropolises
According to the broker Magnolia.fr, by changing borrower insurance, it is possible to acquire more square meters in the 20 largest French cities. The monthly payment of the usury rate since February 1 somewhat facilitates access to the mortgage, but the delegation of borrower insurance remains the only lever for savings to significantly lower its APR and remain under usury.
Bank insurance vs delegated insurance
Bank insurance are generally offered by lending institutions when taking out a mortgage. They have the advantage of being simple to set up, but are often less competitive than delegated contracts in terms of prices and guarantees.
Delegated insurance allow them to choose a borrower insurance contract independent of the lending institution. They generally offer more attractive rates and customizable coverage according to the needs of the borrower.
The Lemoine law now offers borrowers a real opportunity to save money by bringing competition to bear on the borrower insurance market. It is therefore essential to know your rights and take the time to study the different offers available to choose the one that best suits your situation.
2023-06-10 03:00:26
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