Termination of Borrower Insurance: What is Changing with the Lemoine Law - EconomieMatin

Termination of Borrower Insurance: What is Changing with the Lemoine Law – EconomieMatin

The rights of families who chose a mortgage in order to buy a property improved dramatically in 2022. The Lemoine Act was adopted and it will create a real “huge buzz” in the area of ​​borrower insurance which, until then, was almost the preserve of banks. However, for the French, changing the borrower’s insurance can save a lot of money during the term of the loan.

Borrower insurance can be changed at any time

The development of the rights of people who have a mortgage, and above all the borrower’s insurance associated with it because it is semi-compulsory, has taken a long time. In 2014, for example, the Hamon Act introduced the ability to change a borrower’s insurance at any time during the first year of a contract. Then, in 2017, the Bourquin Act limited the ability to change a borrower’s insurance on each contract anniversary, that is, once a year.

But in 2022, everything turned upside down: the Lemoine Act, adopted by Parliament, provides greater freedom for policy holders. It is now possible to change the borrower’s insurance at any time throughout the term of the contract, Either within 20-25 years of credit (The insurance ends when the credit is paid off in full.)

Complete freedom to change as of September 1, 2022

The Lemoine Act comes into force in two phases, in order to allow the actors involved to make their arrangements. First, it has been applied since June 1, 2022 to all borrower insurance contracts (and thus loan offers) signed since that date. But, in fact, this also falls under Hamon’s law.

Things have changed in particular as of September 1, 2022: Lemoine’s law will apply to all contracts, regardless of the date of signature. Thus, even old contracts can be terminated at any time at the simple request of the insured.

Furthermore, the law states that such termination cannot be subject to deadline restrictions or fines. Thus, policyholders are free to do whatever they want, and above all activate competition. No notice period required, and any valid means of communication for the request, from a simple phone call to a recorded letter with acknowledgment of receipt.

Many French people will have to use this new right in the coming months and years: the borrower’s insurance can account for up to 40% of the total cost of the loan, about 30% on average.

Leave a Comment

Your email address will not be published. Required fields are marked *