Loan insurance: delegated contracts vs. bancassurances

Delegated insurance against the group contract

Loan insurance: delegated contracts vs. bancassurances

Loan insurance in delegation or with the bank? 

After the law Lagarde of September 2010 on insurance delegation, the Hamon law of July 2014 facilitates the change of contract during the first year of the loan. This measure was reinforced in January 2018 by the entry into force of the Bourquin amendment This measure was reinforced in January 2018 by the entry into force of the law on the annual substitution of borrower's insurance. However, the banks still hold more than 85% of the loan insurance market share with their "group contracts" compared to 15% held by external insurance companies.

The banks' quasi-monopoly in insurance

The crédit immobilier has always been a product of commercial conquest for banks. Its profitability has always been achieved through the parallel sale of additional products. Among them are still savings plans, current accounts, credit cards, car and home insurance and of course creditor insurance. It is obvious that the banks do everything to keep their quasi-monopoly on loan insurance. It is a coverage that no borrower can escape if he wants to get his mortgage set up. In almost ten years, legislation has allowed the liberalization of the insurance market to guarantee a crédit immobilier. However, when a loan application is drawn up, the lender always offers the borrower a group insurance contract. That is to say an offer with a single rate which was negotiated beforehand but which you will not be able to come back on.

Delegated insurance: let the competition work!

Since the law Lagarde the bank cannot modify its loan offer or change the rate of credit if you take out delegated insurance. You can therefore choose the insurance company of your choice, provided that it offers a level of coversequivalent to that proposed by your bank. Advantage: the coversare adapted to your profile (age, smoker or not, practice of a risky sport, professional travel, place of residence, etc.) This type of contract allows you to make substantial savings . Especially in the case of a long-term loan.

The right to choose without penalty

You have the right to choose and change your loan insurance without penalty. Several pieces of legislation govern your rights to delegated insurance. The Hamon law of 2014 organizes the change during the first year of the loan and the Bourquin amendment, integrated into the law of 21 January 2017 confirms your annual cancellation right for all mortgage loan insurance contracts. From now on, everyone can proceed to a delegation of insurance, i.e. to insure their home loan in another establishment than the one that gives them the loan and subscribe to a more competitive contract that is better adapted to their personal situation.

Unfortunately, laws and regulations do not prevent banks from exerting oral pressure on customers who do not want to engage in long and complicated procedures (judged by the banks!).

The main idea to remember The banker can always advise you to take out your own insurance policy. But he can no longer impose it. Whatever his arguments, you can resist. If you want to find a better solution with an external contract and reduce the cost of your loan insurance, contact our team.