Why take out loan insurance?
Loan insurance or borrower's insurance is not mandatory. However, in practice, a bank will systematically ask you to take out insurance in order to grant you credit. For bank providers, it is above all a question of protecting themselves in the event of an accident in life: death, disability, job loss... It is important to note that a bank cannot impose its choice of insurance on you, you are free to take out insurance with the company of your choice.
Can the banker impose his loan insurance contract?
The banks, and this is normal, try to sell as much as possible, their "home" loan insurance, or the one with which they have a remunerated agreement, when they sell a loan. Under the pretext of a better reactivity, better care,... (which would compensate a fixed price often expensive) even by letting you think that it is a sine qua non condition for the granting of your credit. Beware, this process is an abuse of a dominant position. The bank is prohibited from linking its offer to insurance and must leave you completely free to do so.
- Since 1986, Article LI 22-1 of the Consumer Code has prohibited the practice of "tied selling".
- On 11 December 2001, the MURCEF law (Urgent Measures for Economic and Financial Reforms) in its article L312-1-2, reinforces this prohibition.
- Today, Article L. 312-9 of the Act Lagardefirmly confirms the prohibition on bankers imposing their contracts.
- The Hamon and Bourquin Law complements the Law Lagarde to allow for a change of insurance after the signature of the loan offer in case the bank would have imposed its insurance anyway.
As a result, while borrower's insurance may be requested by the bank to obtain the loan, the offer must state that the borrower may take out equivalent insurance with the insurer of his or her choice. Insofar as you will choose a contract bringing covers equivalents (which goes without saying of course and which is proposed by the brokers), the banker must naturally accept your choice, without modifying in NOTHING his offer of loan (rate, expenses, conditions...)! This is strictly forbidden by law.
Why use a specialized broker for your loan insurance?
With the help of an insurance broker, you will be able to effectively define your profile and coverswhich ones will be best suited to your situation. The broker's mission is also to negotiate contracts at the best price. You will therefore obtain a more suitable and less expensive insurance contract. In addition, you will not be billed for the services of a broker since we are paid directly by the insurer.
FOR EXPATRIATES (or foreign investors): It is all the more important to use a specialized broker for an expatriate: the broker must be used to international risks so that the selected contract is adapted to your country, your travels, accepts without prior declaration your possible future moves, ... so many details specific to your life which must be taken into account while making you benefit from rates as interesting as for a French person in France! It is all the competence and experience of a specialized non-resident broker such as Valorama.
How do I get creditor insurance if I present a significant health risk?
Thanks to the convention "AERASS'Assurer et Emprunter avec un Risque Aggravé de Santé" (Insurance and Borrowing with an Aggravated Health Risk), you can still obtain a home loan. If your state of health does not meet the insurer's basic requirements, your file automatically moves to a higher decision level. If the amount of your cumulative loans does not exceed 320,000 euros and if you are 70 years old at the latest at the end of the loan term, you can benefit from insurance. However, the tariff will probably be higher and the coversleast important.
What happens if my file is refused by the insurer?
If your file is refused, we can apply to another insurer. Your credit will not be validated until you purchase insurance. You can ask the insurer's doctor, always in writing, the reasons for the refusal.
If I'm not happy with my current insurance, how can I change my creditor insurance policy?
- Hamon Law (change of insurance within one year of signing the offer)
The Hamon Law is a legal mechanism which is addressed to all borrowers who have benefited from a loan offer issued as from 26 July 2014 and to loan insurance contracts insured as from this same date. The Hamon law ensures the continuity of the provisions initiated by the (2010Lagarde) and thus makes it possible to encourage, guide and improve the procedure for terminating the loan insurance contract by proposing a delegation of real estate loan insurance external to the Group contract. In order to help the borrowers, whether private individuals or professionals, to benefit from the increasingly intense competition on this market and thus to make significant savings, the Hamon law now offers them, as a complement, the possibility to replace their loan insurance at any time during the first 12 months following the signature of the loan offer. This concerns a real estate transaction (construction, of a property or carrying out work). The purpose of this law is to increase competition and give borrowers more time to think. Thus they can with an coversequivalent level ( Death PTIA, ITT, IPT, ...) benefit from a cheaper and often better covered offer.
=> Process: To do this you must take out and send your new loan insurance contract to the bank with a letter of cancellation letter of cancellation of "Hamon" insurance (within 12 months) At least 15 days before the first anniversary of the date of signature of your loan offer. At Valorama we advise you to start the process at least 2 months before this anniversary date, after that it is risky. The bank is then obliged to reply within 10 days. If it accepts, it will attach a free amendment to the loan contract setting out the change. If it refuses, it must justify its decision in writing.
- Bourquin Law (change of insurance 1 year after signing the loan offer)
Also known as the Sapin 2 law, the Bourquin law came into force on February 22, 2017. It complements the Hamon Law by allowing borrowers to cancel their mortgage loan insurance contract on each anniversary date. In general, the date on which the loan offer is signed (and not the date on which it is released) is used as the anniversary date.
=> Process: To do this you must take out and send your new loan insurance contract to the bank with a letter of cancellation of the "Bourquin" insurance (after the 12 months) at least 2 months before the anniversary date of the loan offer. The bank must then reply within 10 days. If the bank accepts, it must attach a free rider to the loan contract stating the change. If the bank refuses, it must justify its decision in writing.
- Hamon Law and professional loans
The Hamon law does not target the type of loan but the nature of the loan. It concerns all types of property purchases: personal loans for the purchase of a main or secondary residence or a rental investment, for construction or even for work if the amount exceeds €75,000. The Hamon law also takes into account business loans, but only if they are for residential use.
Indeed, the Hamon law cannot be applied to professional loans that are not for residential use, which could lead to a refusal by the bank in this case. Article L 312-2 of the Consumer Code clearly states that the provisions apply to loans intended to finance the following operations Buildings for residential use or for professional and residential use / Their acquisition in property or in possession / The purchase of land with a view to the construction of the buildings mentioned above. Thus, whether it is a loan for a private individual or for a professional, you can benefit from the Hamon law to change your insurance if the nature of your loan corresponds to the criteria indicated above.
Contracts with "lump-sum" benefits or "indemnity" benefits?
- The "lump-sum" benefit guarantees total coverage for all or part of the monthly loan payments (adjusted for the insured portion and according to the compensation method provided for in the contract), regardless of the financial situation (no link with a possible drop in income) and the profile of the insured, whether or not he or she receives other compensation.
- The "indemnity" benefit covers all or part of the term of the loan, corresponding to the loss of income incurred, thus potentially less than what the client has paid for;.
What personal information can the insurer ask me for?
Before agreeing to cover you, the insurer may ask you to provide certain personal information in order to find out your health status. Depending on your age and the amount borrowed, a simple sworn declaration of good health may suffice. However, the insurer also has the right to request more precise information by means of a medical questionnaire or analyses. In some cases, you may be required to have a check-up with one of the insurer's partner doctors. By virtue of medical secrecy, these data remain confidential and the bank has no right to ask you for them. If you have a medical check-up, the insurance company's doctor can only give a favourable or unfavourable opinion. Under no circumstances can it provide detailed information on any diseases or infections detected. It is forbidden to carry out genetic tests even with your consent.
What happens if I make a false statement?
You can refuse to provide information about your health, but the insurer will not agree to cover you. If your answers remain vague you run the risk of no longer being insured in case of disability. You will then have to repay your loan alone. Indeed, if you voluntarily hide or modify information about your health status, your contract is cancelled. To do so, the insurer will have to prove bad faith in court. If this is not established, the indemnity will be reduced in proportion to the insurance premium normally paid if the risk had been declared.