When signing a loan offer, the bank systematically slips its own insurance contract into the stack of documents. We sign, often without comparing, because the sales timeline is pressing. However, this borrower insurance represents a significant part of the total cost of the mortgage, and the leeway to reduce the bill is broader than one might think.
Claim during the change of insurer: the operational trap to anticipate
The Lemoine law allows changing borrower insurance at any time, without fees. On paper, the process seems simple. In practice, one point remains unclear in most guides: what happens if a claim occurs during the transition between the old and the new insurer?
Industry commitments stipulate that the old insurer can continue to cover a claim already declared during the waiting period. A relapse occurring after the new contract takes effect falls under the new insurer, provided the waiting period has elapsed.
In practice, we find ourselves in a gray area of a few weeks where neither party wants to pay. To avoid this, the cancellation date should be aligned with the payment due date, and it should be verified that the new contract does not have a waiting period longer than that of the old one. You can check mortgage insurance on Mon Conseiller Immo to compare waiting periods between contracts before initiating the switch.
Exclusions of coverage without medical questionnaire: what the Lemoine law does not address
Since the removal of the medical questionnaire for loans under a certain threshold, one might think that health history no longer matters. Feedback on this point varies: some contracts taken out without a questionnaire contain general exclusions targeting pre-existing conditions.
The Financial Sector Consultative Committee (CCSF) believes that these exclusions may contradict the spirit of the Lemoine law when they neutralize the prohibition on collecting health data. However, this does not automatically render them null. An exclusion remains enforceable if it is formal, limited, and sufficiently apparent in the contract.
Before signing, we therefore open the general terms and conditions (not the commercial summary) and look for three things:
- Exclusions related to pre-existing conditions, even if formulated broadly (“any condition diagnosed before subscription”)
- Limits on coverage per claim, which can significantly reduce actual compensation
- Clauses for loss of coverage in case of unintentional misrepresentation, the scope of which varies from one insurer to another
Mortgage insurance share: an underestimated cost lever
When borrowing as a couple, the bank imposes a minimum coverage of 100% on the entire loan. The distribution, however, remains negotiable. One can opt for 50/50, 70/30, or even 100/100.
The share determines the portion of the remaining capital covered if one of the co-borrowers is affected by a claim. A 50/50 distribution is cheaper, but it leaves half of the monthly payments to the surviving or disabled co-borrower.
The right reflex: align the share with the actual income distribution of the household. If one of the two generates two-thirds of the resources, a 70/30 coverage better protects than an equal split. The additional cost between 50/50 and 70/30 often amounts to just a few euros per month, for significantly superior protection in case of hardship.
Rental investment: share and reduced guarantees
For a loan intended for a rental investment, banks often accept reduced guarantees. The ITT (temporary incapacity for work) coverage is not always required, since the rents received theoretically cover the monthly payments. One can therefore negotiate a contract limited to death and PTIA guarantees, which significantly reduces the premium.
Delegation of borrower insurance: compare guarantees, not just the rate
The delegation of insurance, meaning the choice of an insurer external to the bank, has been an acquired right since 2010. The bank cannot refuse an external contract as long as it presents equivalent guarantees to the group contract it offers.
The classic trap: comparing effective annual insurance rates (TAEA) without looking at the indemnification method. A flat-rate contract reimburses a fixed amount regardless of the actual loss of income. An indemnity contract reimburses the difference between the usual salary and the benefits received (social security, employer insurance).
- The flat-rate contract suits self-employed individuals and liberal professions, whose incomes fluctuate and whose insurance coverage is often limited
- The indemnity contract is generally sufficient for employees benefiting from good collective insurance and costs less
- The method of calculating contributions (on initial capital or on remaining capital) also changes the game: calculating on remaining capital reduces premiums over the years
Increasing claims: check your contract during the loan
Claims related to borrower insurance have risen sharply in recent years. Disputes often revolve around refusals of coverage citing an exclusion that the borrower did not identify at the time of subscription. A contract signed five or ten years ago deserves to be reviewed, especially if the professional or health situation has changed in the meantime.
Changing insurers remains possible at any time thanks to the Lemoine law. But switching for a lower rate without verifying that the guarantees still cover the actual risk is merely shifting the problem instead of solving it. First, read the exclusions, compare the indemnification method, and ensure that the new contract takes effect without interruption of coverage. The rest is just paperwork.
