You've noticed! It's now easier than ever to change your loan insurance. But you need to know when to do it, and how to go about it. Here's how.
Great savings
No loan without insurance. This is not only a wise precaution for you, in the event of death, disability or loss of employment, but also a guarantee for the bank that it will be reimbursed should anything happen to you.
But this guarantee comes at a cost, which can represent up to 30% of the total amount of the mortgage taken out. Needless to say, you need to look twice and not sign anything lightly. By taking advantage of the competition and changing your insurance, you can save up to a quarter of the total cost of your loan insurance. While saving money is the main reason for changing insurance, it can also be motivated by a change in family or professional situation, a change in health status... necessitating an overhaul of the cover initially taken out that has become obsolete.
How much does it cost?
No cost. The lending institution cannot charge you any fees for this change of insurance. Nor will it be able to change the interest rate or terms of your loan as a result of cancelling your loan insurance contract.
The procedure to follow
In fact, there has been a succession of laws on changing loan insurance. It all began in 2010, with the Lagarde law authorizing the introduction of delegated insurance, i.e. the possibility for borrowers to insure their loan with an establishment other than the one financing their real estate project.
Then there was the Hamon law of March 2014, which allows you to change your loan insurance during the year following the signing of your real estate loan contract. The request to cancel your old contract must be sent by registered letter with acknowledgement of receipt. It must reach the insurer no later than 15 days before the expiry of the 12-month period.
And last but not least, theBourquin Amendment (which came into force on January 1, 2018), for loan offers issued since February 22, 2017. After the 1st year, you retain the option of cancelling the contract each year, on the anniversary date of your loan contract. However, you will have to respect a notice period of 2 months. When you find a new contract, you must inform your bank by letter with acknowledgement of receipt. Once your cancellation request has been received, the bank has 10 days to accept or refuse it. If it refuses, it must give reasons for its decision.
Change subject to conditions
A change of insurance will only be accepted if the new contract offers cover that is at least equivalent to the previous one.
Equivalence is assessed on the basis of 18 criteria determined by the Comité Consultatif du Secteur Financier. These 11 criteria correspond to the minimum guarantees required if you choose another insurer for your mortgage. They must be communicated to you on the information sheet that will be given to you at the same time as all the other loan documents.
Marie-Christine Ménoire