How to change borrower insurance since the Hamon Law?

Since the Hamon law of 2014, you can cancel your borrower insurance in its first year and replace it with a more advantageous one. This provision is extended by the Lemoine law, by a change that can be made at any time during the duration of the contract.

Why change borrower insurance?

It is not obligatory to subscribe to a borrower insurance when you take out a home loan. But since the latter commits you for many years, hazards may arise. The borrowing institution could then require a guarantee to cover these contingencies which could be an accident, death or disability. Therefore, even if this guarantee is not mandatory, you may need to have it.

A choice often imposed by the bank

When you take out a real estate loan, the bank generally offers its own borrower insurance contract: this is the group contract. It is standardized and does not take into account the profile and needs of the borrower. It represents a significant cost in the total cost of the loan, which can represent a significant share (30%). It would therefore be expensive and less practical than the individual options that other insurance companies available on the market can offer. As a result, the borrower can cancel it or simply not adhere to it.

A right reinforced by the Hamon law

Since the Hamon law of March 17, 2014, the borrower's right of termination can apply within 12 months following the signing of the loan contract, for all contracts signed from July 26, 2014, without fees or supporting documentation. to provide. However, he must present other insurance to the lending organization. This must have guarantees similar to those of the initial contract.

To extend the provisions of the Hamon law, since the Lemoine Law, this termination is now possible at any time during the validity period of the insurance.

Significant savings potential

By changing borrower insurance, the borrower can make significant savings on the total cost of their credit, by benefiting from a more advantageous rate or guarantees more suited to your profile. According to a study by UFC-Que Choisir, the average gain is €10 over the duration of the loan, and can reach up to €000 for young borrowers in good health.

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These savings made can be reintroduced into more environmentally friendly initiatives, such as the energy renovation of your home or the purchase of a clean vehicle. In this case, it is more advantageous to opt for an insurer that offers specific guarantees linked to ecology.

How to change borrower insurance?

To change borrower insurance today, the procedure is quite simple, but you must pay particular attention to certain points before proceeding with the termination of your current contract.

Les points de vigilance

Before changing borrower insurance, you should pay attention to certain points:

  • the termination request must be filed at least 15 days before the anniversary date of the loan contract, otherwise you will have to wait until the following year;
  • the cost of delegation: sometimes applied by the bank and which may include administrative fees or an increase in the interest rate in the event of a change of borrower insurance. Check if these costs are offset by the savings made;
  • The levels of guarantees must correspond to your personal and professional situation, and respect the principle of equivalence of guarantees required by the bank;
  • The health questionnaire (or declaration of health status) must be honest and duly completed, under penalty of nullity of the contract or reduction of benefits in the event of a claim.

Steps to follow

To change borrower insurance under the Hamon law, you must follow the following steps:

  • compare the offers available on the market, using an online comparator or using a specialized broker;
  • choose the one which offers guarantees equivalent to those of the group contract, by checking the level of cover, exclusions, deductibles, waiting periods, etc. Refer to the standardized information sheet (FSI) for verification;
  • send a cancellation request to your old insurer and a substitution request to your lending institution, accompanied by the new insurance contract and the FSI summarizing the guarantees, by registered mail with acknowledgment of receipt.
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Then wait for the bank's response. She has 10 working days to accept or refuse the request. In the event of refusal, it must justify its decision and prove that the guarantees are not equivalent. If, however, you think this refusal is abusive, you can contact the insurance mediator or the judge. If accepted, it proceeds with the amendment to the loan contract and informs the old and new insurers of the date of termination and effective date of the new contract.

If the period authorized by the Hamon law has been exceeded, you can still change insurance thanks to the Bourquin amendment of 2018. The latter allows you to terminate your contract each year on the anniversary date of the contract, under the same conditions. conditions as the Hamon law, but with two months' notice. However, since September 1, 2022, any borrower can change borrower insurance at any time during the term of the loan, thanks to the Lemoine law.

The ecological benefits of changing borrower insurance?

Changing insurance for your loan can allow you to obtain several advantages from an ecological point of view:

An incentive for energy renovation

By changing borrower insurance, the borrower can take advantage of the savings made to finance energy renovation work on their home, such as insulation, heating, ventilation, etc. This work helps reduce energy consumption and greenhouse gas emissions, and improve comfort and indoor air quality. Some insurers also offer specific offers for ecological housing, with preferential rates or additional guarantees.

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A promotion of the sustainable mobility

The borrower can use the savings to purchase a more environmentally friendly vehicle, such as an electric, hybrid or low-CO2 emission car. They can choose alternative modes of transportation, such as carpooling, cycling or public transportation. Some insurers encourage these practices by offering premium reductions or additional services to borrowers who adopt these means of travel.

Raising awareness of environmental issues

The borrower can finally choose an insurer that is committed to ecology, by supporting projects whose objective or purpose is to protect the planet. It can thus help to finance concrete actions and raise public awareness of environmental issues. Some insurers even offer solidarity borrower insurance offers, which donate part of the contributions to associations or foundations working for sustainable development.

The economic advantages of changing borrower insurance

Changing borrower insurance can give you several economic advantages, such as:

  • A reduction in the cost of insurance, materialized by a reduction in the effective annual insurance rate (APR) and the overall effective annual rate (APR) of the loan.
  • Better adaptation of guarantees to your personal and professional situation, which allows you to pay only for the risks you actually incur.
  • Greater flexibility of the contract, which allows you to modify the guarantees, the quotas or the insured capital according to the evolution of your real estate project, your income, your health or your profession.

The Hamon law offers great freedom to borrowers who wish to change borrower insurance and allows them to save on the cost of their property loan and, possibly, to make an ecological gesture. To change borrower insurance, they simply need to compare market offers to find the best solution, then respect the conditions and procedures provided for by law.

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