3 Questions Everyone Has About Home Loan Insurance

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It is not easy to make the right choice when it comes to mortgage insurance. What options should I take, do I have to take one, can I change if necessary. Each insurance company has its own offers, but they all stay the same.

How to change mortgage insurance?

You have every right to change mortgage insurance, you can switch from insurance from your bank to an external insurer such as MAAF for example, which have very good offers for this type of product.

This change is possible and is made possible thanks to the Hamon law for the first year and the Bourquin amendment, for loans greater than 1 year. But you still have to respect a few conditions.

To terminate a contract of less than 1 year, all you need to do is take out a new contract and attach a copy with a letter of termination to your current insurance. It must be done with a 15-day notice, before the end of the first year under the Hamon law, for it to be effective.

Regarding contracts of more than 1 year, it is first necessary to make an estimate and see if the equivalences of the various guarantees are respected. Once the respect of the equivalence validated you must send the estimate as well as the contract, if it is about the insurance coming from your bank, they will have to give you their agreement in principle. If your current insurance is not that of your bank, you will have to send a cancellation letter. For this to be applicable, you need at least 2 months before each anniversary date of your insurance, with the Bourquin amendment.

Is mortgage loan insurance compulsory?

It is not mandatory to take out mortgage loan insurance, however some lending organizations may require it. It is generally required by all banks when signing the contract, because it protects the organization in the event of death, incapacity or prolonged stoppage of work.

It is therefore very difficult to miss out on this insurance, even if it is not legally compulsory. The lender can refuse you a loan if you do not take this insurance.

Be aware that you do not have to take out insurance from your bank itself, you can go through an external organization. This is made possible thanks to the Lagarde, Hamon laws, and the Bourquin amendment, which allows you to take out insurance at more advantageous prices for you.

Should you choose a home loan insurance with a 50 or 100% quota?

The quota simply designates the distribution of support by borrower and corresponds to a guaranteed share of capital. When you borrow alone, you will necessarily have a 100% quota, but if you are two to borrow, the choice goes from 50% to 100% per head.

It is often advisable to take a quota of 100%, which will represent a total coverage of 200%. It is a solution, much more advantageous, in the event of death for example the mortgage will be completely covered and reimbursed by the insurance.

This is also highly recommended, in the event of disability, whether it is a total and irreversible loss of autonomy (PTIA) or total permanent disability (IPT). In the case of a PTIA, the insurer will settle the loan pro rata, the totality of the remaining amount due will be reimbursed. Regarding an IPT, this will depend on the disability rate applied by the organization, a monthly reimbursement will then be applied.

Now that you have the answers to the 3 main questions about mortgage insurance, you can get started. You can therefore change insurance during a current contract, you do not have to subscribe to it, but it is advisable and it is preferable to choose a portion at 100%.

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