what changes for borrowers on September 1st

The second part of the law of 28 February 2022 for fairer, simpler and more transparent access to the insurance market for borrowers, also known as the Lemoine law, will come into force on 1 September 2022. From that date each borrower will have the possibility to change the loan insurance at any time under certain conditions.

Have you heard of the Lemonine Law? Originally known as the law of February 28, 2022 for fairer, simpler and more transparent access to the insurance market for borrowers, it is named after the deputy Agir Patricia Lemoine, who implemented this reform.

After a first part instituted from 1 June for new borrowers, the Lemoine Law now applies for all loans in progress from 1 September 2022.

Termination at any time

Specifically, what changes have been made? From 1 March the right to be forgotten has increased from 10 to 5 years for people who have suffered from certain diseases, such as cancer or hepatitis C for example.

Another big change: from 1 June, in some cases, the insurer can no longer request health information of the borrower. Clearly this is the end of the health questionnaire, provided that the insured share of the outstanding cumulative credit agreements does not exceed € 200,000 per policyholder. This cap applies per person, which means that a couple of borrowers could be lent up to € 400,000 without having to fill out a medical questionnaire, as long as the credit is repaid before the 60th birthday.

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Finally, again the Lemoine law the right to terminate the borrower’s insurance at any time and free of charge. It therefore replaces the Hamon law (2014, which allowed the borrower’s insurance to be changed at any time during the first year of the contract) and the Bourquin law (2017, which established the possibility of changing the borrower’s insurance at any date. anniversary of the contract). From now on, borrowers will then be able to do so choose another insurance contract at any timeprovided, however, that it provides at least equivalent guarantees, or that it covers the same situations (death, temporary inability to work, invalidity, loss of autonomy, etc.) as the previous contract.

To make the change it is therefore necessary to send a registered letter to your bank. The latter so he has 10 days to reply your request to replace the contract but may refuse the change of insurance. However, in case of refusal, the latter must be communicated and motivated by a legitimate reason, for example the non-equivalence of guarantees between the two contracts, explains the website of the Ministry of Economy.

Anticipate to save better

Today, according to a November 2020 report by the Financial Sector Advisory Committee (CCSF), 87.6% of borrowers’ insurance contracts are still distributed by the lending banks. against 12.4% of alternative contracts. However, borrowers have a vested interest in looking into the matter.

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According to Magnolia.fr, a loan insurance broker, a 30-year-old borrower with a permanent contract that borrows 200,000 euros over 20 years will pay around 60 euros a month for the insurance by taking the collective agreement offered by the bank, for a total of 14,400 euros. If the same borrower enters into an individual contract, he can hope to go down to 15 euros a month, or a total cost of 3600 euros. For her part, MP Patricia Lemoine explained to MoneyVox that the possibility of terminating the borrower’s insurance at any time would allow for an average saving of between 5,000 and 15,000 euros for a loan of 250,000 euros over 20 years.

Real estate credit: savings, resolution, questionnaire … What changes for loan insurance

Faced with these potential savings, some have already taken the initiative, notes Christophe Boich, insurance director at broker Meilleurtaux: There are customers which brought forward the date of 1 September by starting the procedures with the aim of sending its registered letter to the bank from the beginning of September to change the borrower’s insurance. In fact, if the replacement request and its effect are not operational until September, nothing prevents us from carrying out the comparison phases upstream, starting from today.

Faced with the influx of requests that will undoubtedly arrive from September 1, Christophe Boich doubts the ability of the banks to respond within 10 days, as required by law: Our fear is that the banks are a bit overwhelmed. The law requires a very short deadline for the amendment to be enacted, ten working days, while up until now it was two or three months. To begin with, we will ask the banks for a 30-day invoice, it is in the interest of the customer and the bank.

The fact remains that of all the households that may change a borrower’s insurance, it is difficult to predict how many will actually consider it. We can make the comparison with Bourquin’s and Hamon’s laws, observes Christophe Boich. There have been spikes in activity but it is a drop of water compared to the number of French who can expect to change. A study by UFC-Que Choisir from May 2021 proves him right: 89% of borrowers do not know the cost of their borrower’s insurance and 77% do not know when they can change it.

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