When you take out a mortgage, you also have to insure it. For this, we speak of home loan insurance or more broadly borrower insurance. This protects the borrower and his heirs in the event of death or an accident resulting in sick leave or disability.
And since 2010, with the entry into force of the Lagarde law, it has been possible to bring competition into play by choosing another insurance than group insurance offered by the bank. This is the insurance delegation.
Here are 5 things to know about delegated insurance.
1) You are free to choose your home loan insurance
The Lagarde law allows you to compare mortgage loan insurance contracts before taking out the loan. The bank does not have the right to review the real estate rate if you choose another insurance offer than its own.
The only rule to respect is to present a contract having the same guarantees as the group contract.
2) You can change credit insurance during the loan
If you have opted for group insurance from your bank, you can change it during the life of the loan ( subject to the equivalence of guarantees) :
Up to 1 year after subscription, with the Hamon law,
on each anniversary date, thanks to the Bourquin amendment (provided that the Constitutional Council rules in favor of the measure).
3) The APR allows you to compare the cost of the loan with insurance
To find out the total cost of credit and compare the offers of different banks, you will have to look at the APR. The overall effective annual rate must appear in credit proposals. It includes all costs related to credit (bank charges, insurance, interest, etc.).
In addition, the credit rate, that is, the bank’s remuneration, should not be confused with the insurance rate, that is, the amount of insurance premiums.
4) You can get better coverage for less than your current offer
Home loan insurance is the second most important cost after interest. It is therefore more than ever advisable to compare prices.
But cost isn’t the only thing you need to pay attention to. It will also be necessary to check the level of cover, the exclusions, the terms of compensation (lump sum or indemnity) as well as the times for taking charge.
5) Real estate loan insurance brokers support you
Don’t hesitate to contact a mortgage loan insurance broker to help you with your insurance research. The latter will help you choose a contract with the same guarantees as the bank’s group contract.
Find the best loan insurance, it’s easy and free!