New deal for holders of a mortgage.
From June 1, they can change borrower insurance (compulsory in the context of a mortgage) at any time and free of charge.
The reform, resulting from the Lemoine law voted in February, aims to strengthen competition in this market, largely dominated by the banks (88% market share) which grant the loan.
The savings expected from a change of insurer would be between 5,000 and 15,000 euros on average over the duration of the loan.
Good news in a period of high inflation which affects purchasing power.
Instructions for reform.
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Who is concerned ?
The life of borrowers is greatly simplified.
They no longer have to wait for the anniversary date of their contract to knock on the door of a new insurer.
Initially, only those who have taken out a mortgage from June 1 can compete.
The reform will apply to all existing credits from September 1.
It will suffice for the borrower to contact a new insurer or a new bank to change the contract.
Like what is already possible with auto, home or health insurance.
“One in two borrowers say they are ready to change their contract and 40% of them admit that they would move from 1000 euros in savings over the duration of the loan
, underlines Pierre Etchegoyen, insurance consultant at Sia Partners.
Young people are the most likely to take the plunge.”
Removal of the medical questionnaire
To promote equality between borrowers, the Lemoine law has removed the health questionnaire for mortgages below 200,000 euros (400,000 euros for two) and repaid before the sixtieth birthday of the borrower.
Beyond this amount, individuals continue to answer questions about their state of health and, if necessary, carry out medical analyses.
In addition, for former cancer or hepatitis C patients, the “right to be forgotten” period, which allows them to no longer have to declare their illness to their insurer, goes from ten to five years.
Who will be the main beneficiaries of the changes?
The contracts of people borrowing less than 200,000 euros without a medical questionnaire could see their price climb.
"For lack of being able to assess the risks of borrowers as closely as possible with the medical questionnaire, insurers and bankers will increase the insurance rates for loans below 200,000 euros, at least initially"
, predicts Éric Maumy, president from the broker April.
Price increases could vary between 5 and 10% on average, or even more.
“The contracts will be further segmented according to the age of the borrower,”
adds Éric Maumy.
Unsurprisingly, the younger ones will pay less than the older ones.
"
The risk is that the abolition of the health questionnaire will lead to an increase in prices which will affect all borrowers and in particular the less young who paid less, ”
confirms Maël Bernier, spokesperson for Meilleurtaux.
Individuals in good health, non-smokers and borrowing more than 200,000 euros (they will be subject to the medical questionnaire) should be the winners of the reform.
“Individuals who have taken out a loan of between 200,000 and 500,000 euros are those who will have the greatest appetite to change contracts
,” explains Michaël Donio, partner at Sia Partners.
In addition, a change of insurance is only of interest for mortgages whose lifespan is still quite long (three quarters of loans according to some brokers).
How will the strengthening of competition take place?
Bankers and insurers are on a war footing.
"Many insurers will go on the offensive, especially those very advanced in home insurance
," notes Pierre Etchegoyen.
Many of them are preparing to launch large advertising campaigns from September to inform the French that they can change borrower insurance at any time.
They hope in this way to gain 5 to 10% market share on the banks.
Sensing the threat, the latter are already reacting.
On Tuesday, La Banque Postale and its subsidiary CNP Assurances announced a freeze on the prices of borrower insurance contracts.
These two establishments also eliminate certain "surcharges" charged to people with an aggravated health risk.
Other banking initiatives of the same kind could follow.
Brokers also hope to take advantage of the reform, as do some insurance start-ups specializing in home insurance (Luko, Aumax) with competitive insurance offers.
Borrowers should quickly benefit from increased competition between insurers and bankers.
