Access to real estate has become increasingly difficult for first-time buyers, faced with higher interest rates and stricter demands from banks. In this context, consumer loans seem like a tempting solution, but they also carry significant risks.
Fortunately, the February 2022 Lemoine Act brought major changes to the borrower insurance market, giving borrowers new opportunities to better understand borrower insurance issues and take advantage of more favorable loan terms. This article examines these questions and the results of a survey conducted by Assurly and PwC to assess the impact of these changes.
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Access to real estate for starters
An article by Meilleurtaux, published on Saturday, March 18, 2023, highlights the growing difficulty for first-time buyers to access real estate. Now that the period of low interest rates is over, the latter now have to face a more complex situation when they want to take out a mortgage.
The missed opportunity and the role of personal contribution
Starters, in contrast to second-hand buyers, often start from scratch and generally do not have a substantial contribution of their own. It used to be relatively easy to get a mortgage even with a low co-payment thanks to the banks’ conquest policies. However, this reality has evolved and now makes it more difficult for would-be owners.
Borrower insurance quote
Consumer loans: accessible but risky
Consumer loans are fast, flexible and attractive, but not without risk. These loans, the amount of which varies between € 200 and € 75,000 with a repayment period of more than 3 months, can quickly become problematic in the event of an accident, loss of income or illness.
It is therefore important to be proactive, especially when it comes to borrower insurance.
The Borrower Insurance Market: A Changing Industry
The Lemoine Act of February 2022
- Allows the termination of the borrower’s insurance contract at any time for the purpose of amending it.
- Contributes to the liberalization of the loan insurance market.
According to figures from the report of the Financial Sector Advisory Committee on the balance sheet of creditors insurance, this sector represented 9.8 billion euros in 2019, making it one of the most important areas of creditors insurance in the French market.
The balance sheet of Assurly/PwC
One year after the passing of the Lemoine Act, neo-insurance Assurly, in partnership with PwC, conducted a quantitative survey of 1,000 policyholders to assess their knowledge and understanding of the Act, as well as their insurance management expectations and needs.
- Publication date: 3/17/2023
- 4372 measurements since publication
Study results
The research by Assurly and PwC aimed to determine whether the Lemoine law had succeeded in making the borrower insurance market more accessible. Among the main advances of this law we can mention:
- The right to cancel borrower’s insurance at any time and free of charge for persons who have taken out a mortgage.
- The possibility for borrowers to switch borrower insurance without penalty.
Thanks to these legislative measures, the insurance market for borrowers is therefore undergoing a major change, allowing borrowers to benefit from more favorable loan conditions adapted to their personal situation. It is essential for first-time buyers and other borrowers to fully understand the issues related to borrower insurance and take advantage of the opportunities presented by these recent legislative changes.