Interest rates on mortgage loans have been falling for several months and loan insurance represents an increasing share in the total cost of credit. Civil servants therefore have a vested interest in bringing competition into play.
The two types of borrower insurance
Loan insurance is necessary when taking out a mortgage. It makes it possible to reimburse in whole or in part the lending organization, in the event of death, disability or loss of employment. There are however two possibilities: delegation of insurance or group insurance.
The group insurance offered by credit institutions aims to pool risks, by segmenting the types of insured, the premiums and the guarantees offered. Thus, the rates are determined according to the average age of the insured members of a group, without taking into account the various specificities that may exist. This type of contract is certainly quick to subscribe, but does not allow you to benefit from a personalized contract because the guarantees and prices are identical for all.
The delegation of insurance requires competition. Permitted by the Lagarde law in 2010, it allows you to take out real estate credit insurance with the establishment of your choice. However, the contract signed must ensure a level of guarantees and requirements at least similar to the group contract offered by the bank responsible for the mortgage. If this is the case, the lending institution cannot refuse the delegation of insurance.
Insurance delegation and civil servant status
Being a civil servant, the borrower has the ability to present major arguments to establishments offering insurance offers by delegation. The stability of employment and income in fact considerably reduces risks and makes it possible to obtain far cheaper rates than the group insurance offered by banks.
By bringing competition among all the organizations offering insurance delegation, it is possible to save up to several thousand dollars on the total cost of your mortgage. In addition, in order to save time on these time-consuming procedures and avoid having to push the door of many insurers, it is possible to compare loan insurance online using one of the many simulators on the Internet.
Finally, thanks to the Hamon law adopted in 2014, it is possible to terminate his initial contract for a more advantageous offer (with at least the same guarantees), in the year following the subscription of the loan offer. After these twelve months, the Bourquin law (improperly called Sapin 2) makes it possible to terminate its borrower insurance contract every year on the anniversary date, for an offer presenting equivalent guarantees. Civil servants borrowing for a property acquisition project or having already subscribed to group insurance therefore have the opportunity to make savings thanks to the insurance delegation.