what changes for home loan insurance

What is the Lemoine law?

Today, when a lender takes out a mortgage, it takes more than 8 times out of 10 insurance offered by their bank to secure their loan. However, nothing obliges him to do so: choosing an external insurer could also do him save up to €15,000.

The Lemoine law, brought by the deputy Patricia Lemoine, changes the situation and thus improves loan insurance on 3 aspects:

  • entry into force of l sub-annual terminationto be able to change the insurance contract at any time
  • elimination of medical questionnaire if the outstanding loans are less than €200,000
  • and reduction of the legal term for right to be forgottenwhich increases to 5 years

When does the Lemoine law go into effect?

Borrowers can benefit from the Lemoine law:

  • since June 1 2022, for a new mortgage;
  • and the September 1 2022, to change the insurance on a loan made on an earlier date.

It’s a real step forward for the loan that can easier play the competition in terms of insurance.

The key: better guarantees with a contract more suited to your profile and savings between €6,500 and €15,000 over the entire duration of the loan (source: Que Choisir).

Infographic

1. Termination of motor insurance at any time with Lemoine law

The Lemoine law replaces the Hamon and Bourquin laws* and allows change motor insurance at any time after signing your loan:

  • him sub-annual termination it is possible regardless of the date of subscription of the mortgage and without time limit: you no longer have to wait for the date of the anniversary of the contract to change;
  • the steps are free : the bank cannot object to the fees or penalties of the application;
  • in return, the new contract must present a level of guarantees at least equivalent to that requested by the bank.

*U The Hamon law (2014) allowed the change of mortgage insurance at any time, but only during the first year of the loan. After 12 months, the Law Sapin II – The Bourquin amendment (2017) was applied and allowed termination on an annual basis.

2. The Lemoine law abolishes the health questionnaire

Medical history is one of the main reasons to refuse or charge a mortgage loan insurance premium. To make insurance and therefore credit more accessible to borrowers, the Lemoine law of 2022 delete the medical questionnaire under certain conditions:

  • if the credit amounts to €200,000 maximum (more precisely, if the outstanding amount – that is, the amount you still have to repay – of your loans insured are less than €200,000)
  • and if the full refund is made before the 60 years of the insured

Borrowed from two? To benefit from the Lemoine law, the borrower (or the borrower) must not exceed €400,000 and the insured portion per debtor is €200,000 maximum.

What is the borrower’s insurance questionnaire for?

  • To determine the amount of the premium, the insurer evaluates the risks, especially at the medical level, thanks to this questionnaire. It is submitted to you before the subscription.

  • Yours health history plays a crucial role in the price calculation: depending on your state of health and your history, the insurer reserves the right to apply an additional premium and the exclusions of guarantees.

  • Remember that the health questionnaire is maintained for mortgages of more than €200,000.

3. The Lemoine law improves the right to be forgotten

The right to be forgotten allows certain pathologies to be ignored to the insurer. Currently, remember that:

  • if you had one cancer before the age of 21, the right to be forgotten applies 5 years after the end of the therapeutic protocol;
  • for cancers diagnosed after this age, this period is 10 years.

The Lemoine law therefore aims to make real estate credit more accessible: it reduces the legal period of the right to be forgotten 5 years for former patients cancer and Hepatitis C. These people will therefore be able to benefit from borrower insurance without additional premium, under the same conditions and prices as other insured persons.

In addition, the Lemoine law requires the signatories of the AERAS agreement discuss the possibility:

  • to extend the right to be forgotten to pathologies other than cancer,
  • widen access to the reference grid for pathologies,
  • and to increase the loan ceiling, which is currently at €320,000, for the beneficiaries of the AERAS agreement.

It is agreed that these negotiations must lead to an agreement before July 31, 2022.

Other measures 2022 in the insurance of mortgage loans

In addition to the moratorium insurance termination periods and the modification of the medical questionnaire, the Lemoine law includes other advances:

  • your bank has obligation to inform every year of your right to terminate your insurance contract at any time, under penalty of a fine of €15,000;
  • the insurer must present the total cost of the loan insurance but also the cost more than 8 years (average duration before the resale of the property): you will be able to better evaluate the offer made;
  • if you want to change the insurance and the bank refuses, you must motivate and argue your answer within a maximum of 10 days.

FAQs

The Lemoine law moves the wires in favor of the loan!

U Lemoine’s law aims to make access to mortgage insurance and therefore to loans fairer and more transparent. It translates into 3 main measures:

  • him elimination of the health questionnaireif the repayment of the loan is made before the 60th anniversary of the loan and if it is less than €200,000;
  • him right to be forgotten which increases to 5 years (instead of 10 years) for cancers and hepatitis C;
  • and the sub-annual termination : you can thus change the insurance contract after signing the offer, whenever you want and for free.

It is applied in two stages, depending on the date you took out your mortgage: from June 1, 2022 for new contract credits and September 1 for those who subscribe before June 2022. Since the beginning of the school year, all debtors will therefore be able to benefit from the measures of the Lemoine law.

The right to be forgotten concerns people who have suffered cancer : is the right of will not declare his pathology to the insurer if the therapeutic protocol has been completed for a certain period of time and if there has been no relapse since that date. With Lemoine law, the right to be forgotten applies after 5 years without relapse for cancer pathologies and hepatitis C.

The Lemoine Law, or the story of a long legal battle…

  • In the last decade, many laws have been followed to allow the loan freely choose your insurer. The Lagarde law got the ball rolling in 2010, followed by the Hamon law and the Bourquin law. A legal arsenal to which borrowers have little recourse.

  • It is in this context that the idea of ​​a sub-annual termination Borrower’s insurance (ASAP project) but ultimately unsuccessful.

  • A year later, the Deputy Patricia Lemoine returns once again to the home loan insurance market and supports 3 key measures: simplified termination at any time; the end of the health questionnaire for loans of €200,000 or less and finally a fairer right to be forgotten.

  • At the end of a long journey and after a reference to a joint mixed commission, deputies and senators managed to agree: the Lemoine law was voted unanimously on February 17, 2022.

  • It was finally promulgated on February 28, 2022 and constitutes the last link in the legislative chain in motor insurance. Acclaimed by consumer associations, it is the result of a long political battle to make it fairer, simpler and more transparent loan insurance.

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