Borrower insurance
Continuity of cover: what you lose, or do not lose, when changing insurance
Changing your loan insurance does not reset any counter on the cover. What is carried over, what is not, and the clause to have written.
Changing your loan insurance does not result in the loss of the cover, which is guaranteed by law during the transition, nor the tenure of the credit. Two things start again: the waiting period of the new contract, unless there is a contrary written clause, and the medical underwriting by the new insurer. Continuity of cover does not exist in any text: it is a commercial clause, which is only valid if it is included in the special conditions.
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
- ‘Continuity of cover’ does not exist in any text: it is a commercial clause, granted or refused, which is only valid if it is written.
- The continuity of the cover during the transition is guaranteed by law: the old contract is only terminated after acceptance by the lender.
- The waiting period of the new contract starts again from zero unless there is a contrary written clause, whereas the tenure of the loan belongs to the credit.
- The new insurer carries out its own medical underwriting: a pathology that has appeared since may give rise to a surcharge or a refusal.
- The lender cannot charge any additional fees for the issuance of the amendment during a substitution of insurance.
Changing your loan insurance does not cause you to lose your cover, nor the tenure of your credit. Only the waiting period, which is negotiable in writing, and the medical underwriting start again. The rest: the borrower insurance file.
Does the “renewal of tenure” exist in law?
No: it is a commercial clause, valid only if it is written down. The continuity of the cover, however, is guaranteed by law.
The cover never stops during the transition
The old contract ceases only after the lender’s acceptance and the entry into force of the new one. If the lender refuses, it continues.
Article L. 113-12-2 du code des assurances. Ce délai est calendaire, à la différence des délais de procédure de l'article L. 313-31 du code de la consommation, qui sont comptés en jours ouvrés.
- En vigueur depuis le
- Source
- Article L. 113-12-2 du code des assurances — Légifrance
Never cancel first: sign the new contract, send it to the lender, obtain acceptance, then cancel. The procedure: the Lemoine Act.
What starts again, counter by counter
The waiting period of the new contract starts again, unless there is a written clause to the contrary. The excess, however, restarts with each claim in every contract: read a policy document.
| What is discussed | Starts from zero? | Where to check |
|---|---|---|
| The cover during the transition | No, never: the law prohibits it | Insurance Code, art. L. 113-12-2 |
| The waiting period of the new contract | Yes, unless a contrary written clause exists | Special conditions of the new contract |
| The excess | Not applicable: it restarts with each claim, in all contracts | Policy document, excess section |
| The tenure of the loan | No: it belongs to the credit, not to the insurance | Amortisation schedule |
| The proportion and scope of guarantees | No, they are copied over — but the copying must be verified | Amendment to the loan offer |
| The medical acceptance | Yes: the new insurer carries out its own underwriting | Questionnaire of the new contract |
What is retained, provided you verify it
Check the share on the endorsement: a transcription error is the most common trap (the share in a couple). Request the removal of the waiting period in respect of your continuous cover, stated in the special conditions.
The real risk: the new medical underwriting
A condition that has arisen since the first contract will be known: a premium loading, an exclusion or a refusal remain possible.
- Do nothing during a period of sick leave or immediately afterwards.
- Declare everything: an incomplete declaration.
- Already subject to a premium loading? Refusal, premium loading and AERAS.
Your age weighs on the benefit
You are priced at your current age: the longer you wait, the less the change yields. However, a group contract on the initial capital never decreases: calculate the total cost over the remaining term. Each new change reopens a waiting period.
The timeline, and the fees the lender cannot charge
Article L. 313-31 du code de la consommation. Deux points de départ distincts : la réception de la demande de substitution, ou la réception d'un autre contrat d'assurance selon le cas.
- En vigueur depuis le
- Source
- Article L. 313-31 du code de la consommation — Légifrance
Même article. Ce délai court à compter de la réception de la demande de substitution — il ne s'ajoute donc pas au précédent, il court en parallèle.
- En vigueur depuis le
- Source
- Article L. 313-31 du code de la consommation — Légifrance
Dernier alinéa du même article. Cette gratuité vaut pour la substitution d'assurance, jamais pour un rachat ou une renégociation de crédit.
- En vigueur depuis le
- Source
- Article L. 313-31 du code de la consommation — Légifrance
The two periods run in parallel. Endorsement fees? Dispute them in writing.
The sentence to have written before signing
“Please confirm to me in writing, in the special terms, whether a waiting period applies to the cover subscribed and, if applicable, whether it is waived in respect of the continuous cover for which I provide evidence under the previous contract.”
Then compare over the remaining term with the TAEA.
Do you have your amortisation schedule to hand? Create your file or have it explained to you over the phone.
This article is for informational purposes only. The activity of insurance intermediation is carried out as an ancillary activity to the activity of intermediation in banking operations: it does not constitute an offer of insurance, nor personalised advice on a specific contract.
Sources
Read next
- Home loan insurance in Lyon: Sandy MASCART
- Mortgage in Lyon: frequently asked questions
- Reading a borrower insurance policy document: the six lines that determine your compensation, and the seventh Incapacity, compensation, deductible, exclusions, age limits, TAEA: the reading order that reveals what you will receive, and the forgotten seventh line.
- False health declaration: nullity of the contract or simple reduction of the indemnity? Nullity or indemnity reduced pro rata: everything hinges on intent, and it is for the insurer to prove it. What is enforceable against you, and how to react.
- 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.
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