The borrower insurance market has evolved in recent years, notably with the promulgation of the Hamon law, the state of the art and answers to follow: Either subscribe to the bank’s insurance (group insurance) or opt for equivalent insurance with another insurer of their choice: delegated insurance.
A legal evolution linked to the Hamon law
A major change in the law came last year, since since the end of July 2014 it is possible to change the insurance-borrower contract one year after signing its mortgage.
The Bank can not refuse this change if the new contract presents at least the same guarantees as the insurance contract proposed by the banker.
Increase competition between the historical players in the insurance market
The market should therefore really start this autumn with the emergence of new players, or increase competition between the historical players in the insurance market. This increase in competition should logically pull prices down and allow the consumer to have more competitive products on a service that could be very expensive for them.
At the Good Finance for example, more requests would have been received related to the Hamon law ” A number of borrowers had to realize that they had the faculty to change insurance, ” says one at the insurer historical mutualist.
Overly low borrowing rates
Borrowing rates at historically low levels will therefore encourage households to renegotiate their mortgage or to take out new loans in view of the economic situation. In some cases, the cost of borrower insurance may represent up to 25% of the overall cost of credit.
In practice, households will have two options: either subscribe to the bank’s insurance (group insurance) or opt for equivalent insurance with another insurer of their choice: delegated insurance.
To note: some actors innovate and propose to obtain several insurance quotes.