Home loan: changing your borrower insurance, how does it work and why can you win?

“Is it possible to change the borrower insurance of my mortgage?” UFC Que Choisir responds.

Yes, the law passed by Parliament on February 28, 2022 makes this change much easier. Since June 1, 2022, all borrowers taking out a mortgage loan insurance contract will be able to change it at any time.

Previously, this was only possible during the first year of the loan and then only on the anniversary date of the signing of the loan offer. For borrowers with a current contract, this measure will be effective on September 1st.

Important: the law stipulates that insurers must inform policyholders of the existence of this right to termination and its terms of implementation. This new provision is the culmination of a long fight (for more than 10 years!) by the UFC Que Choisir against the reluctance and obstacles of all kinds from the banking lobby, which monopolizes more than 80% of the borrower insurance market. .

We understand their reluctance when we know that out of 100 € of premium paid, 32 € are paid back in compensation, i.e. a margin of 68%!

1. A source of savings

For the consumer, changing insurance can be a source of substantial savings amounting to several thousand euros.

And yet it is clear that more than 80% of policyholders keep the insurance contracted with their loan, unaware, especially in this period of low interest rates, that borrower insurance represents 20 to 40% of the total cost credit (interest + insurance) and are unaware of the savings that can be made by changing insurance.

You can estimate the possible gain by changing insurance by consulting our online calculator on our website quechoisir.org which will also offer you a change support service.

2. The bank has a say

Be careful, this increased freedom is not a blank check for changing insurance. In practice, the bank always has a say. It has a period of 10 days to respond to a request for contract substitution made by registered mail. And it retains the right to oppose a refusal, which must be communicated and justified by a legitimate reason, such as the non-equivalence of the guarantees between the two contracts.

If accepted, the bank must then send you an endorsement mentioning the new overall rate of the credit taking into account the new insurance.

UFC Que Choisir Montpellier, 0 467 663 296, [email protected]lier. ufcquechoisir.fr and quechoisirmontpellier.org.

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