Borrower insurance
Mortgage insurance refused or surcharged: the AERAS agreement, appeals and solutions
Refusal, exclusion or surcharge: the three levels of AERAS review, the capping mechanism, appeals, and the realistic alternatives when nothing works out.
A refusal of mortgage insurance is not the end of the road. The AERAS agreement organises a three-level review, triggered automatically when the standard review does not yield a result, caps the surcharge subject to income conditions and provides for free mediation. If the insurance still cannot be obtained, the lender may accept a pledged savings account, a third-party guarantee, an adjusted loan amount or a reduced term.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- A refusal, an exclusion and a surcharge produce different consequences: only the exclusion or the surcharge leaves the guarantee open.
- The AERAS agreement organises a reinforced review in several levels, triggered automatically when the standard review does not yield a result.
- The right to be forgotten prohibits the insurer from collecting certain medical data after a period fixed by law, counted from the end of the treatment.
- The reference grid of the agreement is regularly revised: a request refused in the past may be approved today without any change in the situation.
- When the insurance cannot be obtained, the pledge of a savings account, a third-party guarantee, an adjusted loan amount or a reduced term remain alternatives.
A refusal of insurance can cause the loan to fall through, often just days before the suspensive condition. This is not the end: the AERAS agreement mandates several examinations, appeals exist, and other guarantees can replace the insurance. See the borrower's insurance dossier.
No health data is collected on this site. First, check whether a health question will be asked of you: when the questionnaire disappears.
Refusal, exclusion or surcharge: what each one changes
A refusal closes the guarantee. An exclusion grants it without a specific cause of loss. A surcharge grants it against a higher premium. Two insurers rarely respond in the same way.
| The response received | What is covered | What the bank does with it |
|---|---|---|
| Refusal | Nothing for the guarantee concerned | Blocks the loan if the guarantee is required |
| Deferral | Decision postponed to a later date | Blocks the schedule, not the principle |
| Exclusion | Everything, except losses linked to the excluded cause | Often accepted if the exclusion does not affect the required core |
| Surcharge | Everything, against a higher premium | Accepted, but the surcharge weighs on the debt-to-income ratio |
An exclusion is read in the contract: see the exclusions.
The AERAS agreement: several examinations before a final refusal
“Insuring and borrowing with an aggravated health risk”: an agreement between the State, banks, insurers and associations. It organises a reinforced examination, within limits of outstanding amount and age.
- The outstanding amount is cumulative, across all credits.
- The age is assessed at the end of the loan: shortening the term may suffice.
The two thresholds are read on aeras-infos.fr.
- First level: the standard examination.
- Second level, automatic: a specialised medical service re-examines.
- Third level: a pool of reinsurers rules.
You have nothing to request, but it takes time: have the suspensive condition extended from the preliminary sale agreement.
The right to be forgotten: what you no longer have to declare
Once the statutory period following the end of the therapeutic protocol has elapsed, no information regarding the conditions covered may be requested. It can no longer form the basis for a refusal, an exclusion, or a surcharge.
The date of the document issued by the medical team is authoritative. When the question is asked lawfully, an incorrect answer will be penalised at the time of a claim (false declaration).
A previous refusal may now lead to approval
The AERAS reference grid lists situations that are insurable without a surcharge or exclusion, or with a capped increase. It is revised regularly.
A refusal reflects the reference criteria at a specific date: submit the application again.
Capping of the surcharge
Subject to income and debt-to-income ratio conditions, the surcharge is capped and the excess is mutualised, without any request from you.
Check that the proposal mentions this. Is the debt-to-income ratio just above the threshold? Adjust the term, the deposit, or the amount before the proposal.
After a refusal: three steps
Request the reasons, addressed to the doctor you designate. Verify that the three levels have been exhausted. Refer the matter to the mediation commission if the procedure was not followed.
- Designate your doctor at the time of the application: several days are saved.
- Ask at which level the file was stopped: if it stopped at the first level although you met the conditions, this is a procedural defect.
- The mediation commission is free of charge, reviews the procedure, and does not suspend your timeline.
Re-read the notice. Loan finally refused: what to do.
Four alternatives to insurance
No law mandates insurance: the lender may accept another form of security or partial cover.
- The pledge of savings: the funds remain yours, but are frozen.
- A third-party guarantee: burdensome for the guarantor, for the entire term.
- The adjusted proportion on the insurable person.
- A shorter term: less capital insured, often less surcharge, but a higher monthly instalment.
The lender may only rely on its equivalence criteria (to oppose them; to change them later: the Lemoine Act). The mortgage, however, does not replace the insurance.
Your method when insurance is an obstacle
- Initiate the insurance assessment before the preliminary sale agreement.
- Extend the suspensive condition if a reinforced review is likely.
- Submit one complete application at a time: three in parallel scatter the documents.
Beware of anyone proposing to ‘unblock the file’ in exchange for an advance: verify their registration with the single register of intermediaries.
Have your suspensive condition sized by telephone, without any medical document. The activity of insurance intermediation is carried out as an ancillary activity to the activity of intermediation in banking operations: this article constitutes neither an offer of insurance, nor medical advice, nor personalised advice on a specific contract.
Create your file and initiate the insurance from the outset.
Sources
Read next
- Home loan insurance in Lyon: Sandy MASCART
- Mortgage in Lyon: frequently asked questions
- Is borrower insurance mandatory? No, but the lender may require it: who decides what No law requires you to insure a mortgage, but the lender may require it: what the lender decides, what you choose, and what to do in the event of a refusal.
- Mortgage insurance share: 100/100 or 50/50, how to choose as a couple What remains due to the survivor depending on the chosen split, the overlooked effect on sickness benefit, and a decision grid based on the income gap.
- Mortgage refused: the 12 real reasons and the 15-day action plan Mortgage refused: identify the true reason among the 12 most common, correct it with evidence and resubmit in the right order within fifteen days.
- Health questionnaire: when it truly disappears, and when it returns The exemption is calculated per insured person, on their share of the cumulative outstanding balance: the table that tells you, person by person, if exempt.
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