This new law allows changes to borrower insurance at any time and without charge or penalty. It represents a revolution in the property insurance world. In particular, the Lemoine Law allows relatively significant savings to be made. Decryption!
Lemoine Law in a Nutshell
Proposed by MP Patricia Lemoine, this new law was passed on February 28, 2022. It allows you to cancel a borrower’s insurance contract at any time to find another more advantageous one. In other words, the Lemoine Act allows any owner to choose borrower insurance that is not only just as protective, but also less expensive. Entry into force on 1eh June 2022 for loan offers signed from this date and 1 September for loan offers signed at an earlier time, it offers a number of advantages for the borrowers. In particular, they no longer have to wait for the anniversary of the signing of their mortgage contract to switch borrower insurance. Only one condition to take advantage of it: the new loan insurance agreement must be at least as protective as the previous one: it is said that it must correspond to the guarantee with the level of coverage required by the bank.
Thanks to the Lemoine Law, young owners can compete and choose the offer that benefits them the most. Individuals have already claimed to have saved several thousand euros thanks to this law. In addition, the abolition of the health questionnaire allows borrowers with less than €200,000 of insured outstandings reimbursed before their 60th birthday to have access to more attractive offers.
Save money thanks to Lemoine’s Law
Since this summer, a 20% increase in claims has been noted each month compared to May. Young and future owners are aware of the financial benefits that the Lemoine Law can offer them. Changing mortgage insurance can reduce the costs of a property purchase. According to experts, this new law will have achieved its goal: to open the loan insurance market to other players and put an end to the banks’ monopoly as long as this dynamic continues in the coming years.
This reform of the borrower’s insurance is an immediate solution to achieve significant savings on the total costs of the mortgage loan. In addition to the removal of the health questionnaire (for loans up to €200,000 that end before the borrower’s 60th birthday), the reassessment of the right to be forgotten is another notable change brought about by the Lemoine law. From now on, the right to be forgotten no longer applies for 10 years, but for 5 years.
Obviously, people who have suffered from cancer or hepatitis C no longer need to mention it to their insurance company if the therapeutic protocol has been completed for more than 5 years without a relapse being noted. They will no longer have to pay an additional premium due to their previous illness.
Infra-Annual Termination, a flagship measure of the Lemoine Act
Among all aspects of the Lemoine Act, it is undoubtedly the right to infra-annual termination for borrower’s insurance that remains the most economical solution for all concerned. Taking out an attractive loan insurance formula helps lower the cost of a real estate project. Before the Lemoine Act went into effect, a large proportion of borrowers chose the contract recommended by their bank. At present, they can freely compare offers, terminate the current contract whenever they wish and take out a new, more advantageous borrower’s insurance.
Before, most borrowers did not know that switching to a more advantageous borrower’s insurance could reduce the cost of their mortgage. As a reminder, changing the contract can save them several thousand euros on the total cost of their credit. The Lemoine Act greatly facilitates the process of modifying mortgage insurance. More than 7 million households now have the chance to compete for a more affordable borrower’s insurance contract. It is the perfect solution to reduce monthly payments regardless of debtor profile and repayment period.
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