Real Estate Loan Insurance: Which Laws Compare Offers?
Several texts have reformed the insurance of mortgage to compete with insurers. These are the Cogilaw, Mahon and amendments. The Credither Guide returns to each of these devices.
Why reform mortgage insurance?
No one is immune to a “hard blow” in life: disability, job loss, illness. Difficulties that can be reflected in the repayment of your loan maturities. This is where home loan insurance comes in, it protects lenders and borrowers by guaranteeing the payment of monthly payments.
But this is a cost, the most important after interest rates. And borrowers can not escape because loan insurance – although not mandatory – is required by banks.
This statement drawn up, the legislator wished to develop competition in this sector. The reason? The comparison of insurers reduces the cost of insurance.
The Cogilaw Company
This is the law that instituted the delegation of insurance, that is to say, to opt for an insurance other than that proposed by your bank. One condition: the guarantees of the ” new ‘Insurance must be identical to those proposed by the original bank.
Adopted in 2010, this device provided for several measures in favor of borrowers’ purchasing power, including the reform of borrower insurance.
The Mahon Law
In application since January 1, 2015, the Mahon Law goes further than the Cogilaw Company. Now, borrowers can change credit insurance for up to 1 year after signing the loan insurance.
Why extend this time? Because households do not necessarily have the time to look for another insurance when negotiating their home loan. This additional period allows them to compare more serenely the offers of borrower insurance.
The last measure came into force in 2017. To encourage the delegation of insurance (only 12% of insurance contracts signed in 2016), the text authorizes borrowers to terminate their insurance contract on each anniversary date.
In summary, households can cancel their mortgage insurance:
up to 1 year after signing their mortgage (Mahon Law);
on each anniversary date of the insurance contract, once the ” Mahon deadline “Passed (amendment ).
Note that the amendment applies in two steps:
It concerns all insurance contracts signed as of March 2017;
It will apply to previous contracts as of January 2018. For example, let’s say you signed a home loan and a borrower insurance in November 2016. You can then cancel your contract within one year under the Mahon Law (until November 2017 so).
How to compete with insurers?
By using a mortgage insurance comparator. After completing a form, you can access the main market players in a few minutes without leaving your home.