Borrower insurance: the Hamon law in force from July 26, 2014

Published on by Delphine from OltottMesz

In the coming days, a new law on credit insurance will come into force. Presented in the new consumer bill last fall, this law will come into effect from July 26, 2014.

Many expect this new law, which aims to grant an additional period of one year to the borrower to choose his final credit insurance. Let us hope that this new law is the expected effect, ie significantly reduce the impact of borrower insurance which until then represents a considerable sum when subscribing to a mortgage.

Despite the Lagarde law, and the fact that a borrower is no longer obliged to take out loan insurance with the same organization as for the credit offer, things had changed very little, because it was complex to implement. When subscribing to a mortgage offer, the borrower will focus mainly on the financing offer itself, and very little on the insurance that goes with this offer. This for various reasons but above all for lack of time.

The Hamon law was therefore created in this sense. Give the borrower the necessary time to make the best choice regarding his credit insurance and thus reduce his cost. The borrower will therefore have, from the day of signing his contract, a period of one year to carry out the necessary steps and thus put the different insurance organizations in competition to choose a cheaper credit insurance , all with the same guarantees.

The competition is already very present, however it remains to be seen whether this law will significantly change the situation. Organizations offering credit insurance have multiplied since this measure was voted. We will have a first response in the coming months.

Learn more about the new loan insurance reform.
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