Insurance can be expensive for a borrower. But the law has allowed him since 2022 to change his contract if he wishes.
With the rise in interest rates, the cost of home loans has soared. But even within the costs of your credit, it is possible to make savings: this is the case for borrower insurance, which can represent a large part of the price of the loan.
Example: a couple wants to borrow 250,000 euros, at a rate of 4%. His credit will cost him around 190,000 euros. But in this price, we find no less than 45,000 euros of insurance.
However, since February 2022 and the Lemoine law, insurance can be taken out with the bank which grants the loan, but not only: a consumer is free to take out insurance elsewhere, or to change it in the middle of a loan. The savings can be there: in the case of the couple cited, alternative insurance can cost them less than 7,000 euros, or 38,000 euros
Banks are trying to force their hand
The only condition: that the guarantees are equivalent. The bank cannot then refuse credit because you take out insurance elsewhere, as Maître Marc Mouxel, lawyer in Angers at Consilium Avocats, points out:
The real estate credit contract cannot be subject to an insurance obligation. This may be of interest to the General Directorate for Fraud Repression, it is a breach of the Consumer Code, in particular Article 132-1, since it is a tied sale. This also deprives the consumer of substantial savings, because they have optional guarantees in the contract which are not necessary.”
Banks are indeed seeking to circumvent the law in different ways, in particular by including clauses that alternative insurers cannot offer, which helps prevent customers from signing elsewhere. Retirees or stay-at-home parents were thus given guarantees against job loss, which no other insurer could follow.
The only strategy to ensure freedom of movement without getting angry with your bank: take out insurance with the latter, and have it verified for a broker before signing. You can then remain free to change your contract if you wish.