In order to validate your credit application, your bank will systematically ask you to subscribe to a borrower insurance . But if this type of contract is often very comprehensive and easy to conclude, it is both expensive and not very customizable. If you have already subscribed to the contract proposed by your bank, know that it is possible to terminate the insurance borrower , but you must take the right way. So, how to proceed with the termination of a current home loan insurance with the bank? This is what we will see together in the lines below.
Terminate your borrower insurance during the year
If you concluded your borrower insurance contract less than a year ago, the Hamon law of 2014 allows you to proceed to the cancellation of the borrower insurance in favor of a more interesting contract (right of substitution during the first year). This law was put in place to promote competition between the different lenders and allow borrowers to enjoy more advantageous rates.
To terminate the borrower insurance contract you have with your bank, simply send a letter with a copy of your new policy. In addition, you must respect 15 days notice. You have the option to take the steps yourself or use the services of an insurance broker.
Take advantage of the device put in place by the Bourquin law
Coming into force since 2017, the Bourquin law , also known as the Sapin 2 law , gives borrowers the possibility of canceling their loan insurance contracts each year. This scheme was introduced with the aim of giving borrowers a means to negotiate their insurance contributions at the time of the conclusion of the loan. He then comes to modify a market long dominated by the group contracts proposed by the banks.
To exercise your right, you must inform your bank no later than 2 months before the anniversary date of your policy . You will also need to obtain its authorization and agreement on the equivalence of guarantees before you can enter into a new contract. As for the procedure itself, you must send 2 letters to your bank.
- One will be on the request for an agreement in principle on the equivalence of guarantees;
- The other on the final validation request and the termination of the contract that binds you with the bank . You will only be able to join a new contract once you have received the agreement in principle from your bank.
Cases of refusal of the bank
For various reasons, the bank may refuse the substitution of the borrower insurance contract . This is what will happen when the new contract guarantees are lower than your current contract. In principle, in this case, the bank will inform you by specifying the reason for its decision. If you want to challenge this decision, make a complaint to the director of the agency.
If the latter does not answer you within 2 months after your request, take your case to the Prudential Supervisory Authority. If the amount of your contributions exceeds 10,000 euros, you will have to take legal action against your bank. Finally, if your bank simply does not respond to your request for contract substitution, there may be a problem with your file .
To completely complete the subject, it should also be noted that the termination of the borrower insurance is not always easy to implement a technical point of view. Take it well in advance to achieve it, it’s much better, especially after more than a year of bank loan.