Getting savings on the cost of a mortgage by playing the insurance delegation card is an axis to study for borrowers. However, still very few of them have taken steps.
Cheaper senior borrower insurance thanks to insurance delegation
Supposed to redistribute purchasing power to the French, the insurance delegation is far from achieving the expected objectives. Banking establishments are still at the head of 85% of the market against 15% for business insurers. As a reminder, this process is accessible to all borrowers who want to change insurance that covers a home loan being repaid. One of the conditions? Bring guarantees at least similar to the original contract contracted with the lending organization by turning to insurers or to an intermediary in banking operations to change loan insurance with a buyout of mortgage.
By opening the market in January 2018, Senator Tan on the initiative of the amendment offered pricing opportunities. Indeed, the end of the banks’ monopoly on loan insurance was accompanied by an increase in competition and a drop in contract costs. But what are the gains to be made by changing insurance? The senator announced that households can save 3 billion euros per month by using the loan insurance delegation, on a total volume of 9 billion euros in monthly contributions.
Not all French people know how to change loan insurance
But what is preventing households from taking the plunge? Several hypotheses are to be raised. Already, a lack of communication about the existence of the insurance delegation can slow down the number of requests. Indeed, many of the borrowers may simply not be aware of such a possibility.
A study commissioned by a broker also illustrates this observation since 43% of those questioned were not aware of the change of insurance for a home loan. And only 29% believed that they knew the principle and the functioning of an insurance delegation.
Banks play the opacity card to avoid a massive leak of their policyholders
In addition, lending banks sometimes go ostrich when requesting a change in loan insurance in order to make it obsolete in terms of time. Specifically, the borrower must show at least 2 months before the anniversary of the signing of the loan offer, the reference date from July 1, 2019, of its intention to make his mortgage to a competitor.
Problem, some advisers do not respond within the time limits and the procedure becomes legally impracticable. In order to better manage the time constraint, it is therefore advisable to make arrangements 3 to 4 months before the legal notice.