For many French people buying a home is synonymous with lending. To make a mortgage is also to look at the borrower insurance chapter. In this one, many novelties have taken place in recent years. In addition to the Hamon law, the Bourquin amendment also changes the situation.
Loan insurance for what purposes?
Buying a borrower insurance is not legally obligatory. However, many banks impose this coverage when signing the loan. It must be said that this type of insurance is a guarantee of weight for financial organizations. Opting for loan insurance can be covered for the duration of the mortgage. It intervenes for example if over the years the borrower finds himself in a situation where he can no longer repay his loan. This can happen especially in case of job loss, physical disability or death . It is therefore a reliable way for organizations to protect themselves against repayment defaults. The problem is that lending banks usually offer their own insurance offer. For the sake of convenience, borrowers often accept this one. Yet it is on this product that the banks realize significant margins .
What laws to facilitate termination?
Since 2010, with the law Lagarde then Hamon, the government has decided to simplify the termination of these insurance to open the market. The Hamon law makes it possible to freely terminate the borrower’s insurance during the year following the signature . To achieve this, it is necessary to choose another borrower insurance offering the same level of guarantees as the previous one. In February 2017, a new amendment was voted bearing the name Bourquin. The Bourquin amendment adds, in addition to the Hamon law, the possibility of canceling its loan insurance on each anniversary date . This means that in addition to being able to change the offer in the first year, the borrower can also choose a new one every year after the first year. This advance pushes a little more to the competition of this market.
Of course, banks are not happy about this news related to a strong shortfall. This measure pushes more to the delegation of insurance. The French Banking Federation then decided to appeal to the Constitutional Council to challenge this right. The latter is expected to deliver his verdict on January 12, 2018.