A cheaper loan insurance policy looks attractive, but will it protect you properly and fit your mortgage? Start by separating three questions: what the insurance covers, which credit deadlines apply, and how to resolve a disagreement. This guide explains French rules, including for cross-border workers borrowing in France. It does not describe UK, US or other national lending law.
Switching insurance without waiting for the anniversary
For mortgages covered by France’s Lemoine law, borrowers may cancel their loan insurance at any time without a cancellation fee. The replacement must provide a level of cover equivalent to the lender’s requirements. The French Ministry of the Economy explains this right to switch.
A lower premium alone is therefore insufficient. Check the cover and submit the documents to the bank. Under Article L313-31 of the French Consumer Code, the lender has ten working days to notify its decision under the applicable conditions. A refusal must give reasons. Following acceptance, coordinate the end of the existing policy with the start of the replacement so that no period is left uninsured.
Compare protection and cost over the same period
Have your repayment schedule, current insurance wording and the bank’s requirements ready. Pay particular attention to:
- the cost over the remaining loan term, changing premiums and any fees;
- the percentage of the loan insured for each borrower;
- definitions of incapacity and disability, exclusions and waiting periods;
- conditions affecting your occupation or work in Switzerland.
Our loan insurance comparison tool is a starting point. Its results need to be checked against your existing policy and the lender’s criteria. A saving only makes sense when the comparison clearly identifies the period, insured proportions and protection involved. Keep a copy of the documents used rather than relying on a monthly price alone.
Two different periods: consideration and withdrawal
For a French mortgage offer, ten calendar days must pass after receipt before you can accept. For French consumer credit, there is generally a fourteen-calendar-day withdrawal period after acceptance. Do not assume the consumer-credit withdrawal period applies to a mortgage offer. Service Public explains the distinction between time to consider an offer and time to withdraw from an accepted contract.
Put a complaint in writing first
Write to the relevant complaints team with a clear timeline, the disputed point, the outcome you want and copies of supporting documents. Keep the originals and evidence of sending. A bank’s refusal of replacement insurance is different from an insurer’s disagreement about a claim: the responsible organisation and mediator may differ.
After this written complaint, you may approach the competent consumer mediator free of charge as soon as you receive an unsatisfactory final response, or in any event two months after sending the complaint. The mediator’s admissibility rules still apply. ABE Infoservice sets out the French complaints and mediation procedure.
Find the appropriate next step
If the dispute remains unresolved, France’s juge des contentieux de la protection can hear disputes relating to consumer credit or mortgages. A disagreement about insurance cover or compensation needs to be directed according to its nature: the same procedure should not be assumed to apply to every dispute. Legal advice can help identify the competent court for your case.
For help preparing a comparison or identifying the documents for an insurance switch, contact Alperea Assurances. We can help you ask the right questions before changing your cover.
