Insurance delegation is a subject that we often hear about, without having had the opportunity to get into it ourselves. Since the 2010 Lagarde law, your banker cannot, legally in any case, refuse the establishment of a delegation of insurance if it offers guarantees identical to those offered by the bank. As far as I am concerned, it is in place on the credit of my main residence and has saved me several thousand euros compared to my bank’s insurance. But finally, the delegation of insurance, what is it?
Very often, when you sign your mortgage, you ask yourself questions about obtaining the best possible rate. We often forget other elements to take into account, which are important. This is particularly the case:
Most of the time, this insurance is simply taken from the organization that grants you your credit. The question does not even arise, or is in any case only very rarely addressed directly by your banker. The Largarde law, adopted in September 2010, nevertheless facilitates the passage by a delegated insurance and therefore competing with that of your bank. It indicates in particular:
Or :
Even so, insurance is often part of your credit package. The bank will potentially refuse to make you a rate offer as attractive as part of an insurance delegation as if you took out insurance with them… But think about it in your elements of negotiations with your bank adviser, several thousand euros in savings are at stake, which is far from negligible!
The big difference between an insurance delegation and the group insurance offered by your bank can very often be summed up in one word: personalization. Quite simply. In group insurance, there is a group. And this group means in particular that everyone is housed in the same boat : whether you are in your twenties, thirties or forties, no distinction. Whether you are a sportsman or a cushy father does not change anything. The advantage is obvious, you are not asked any questions.
The side effect is that this insurance is intended for the masses, and therefore if you are young, athletic and in good health, you do not benefit from the financial advantage that your profile can afford . And yes, who says young says, among other things, less risk of having health problems (which I don’t wish on anyone!). In the context of an insurance delegation, this favorable statistic is accompanied by a lower cost of insurance than for an older profile. You have grasped the principle I think. Caricaturing to the extreme, the younger you are, the more relevant it will be to go through an insurance delegation.
The previous paragraph partly explains the price difference often observed between group insurance and insurance delegation. Another point can explain this difference, although it is not necessarily systematic, in one direction as in the other moreover: it is the insurance of the initial capital borrowed in one case, against the insurance of the capital remaining due in the other. The idea is not to go into detail, but to present the principle. Purists won’t blame me. Two important concepts:
The insurance of your credit is expressed through a rate, which ultimately corresponds to an amount. Without generalizing, by subscribing to group insurance, you will pay each month an amount corresponding to the initial capital insurance, ie €65,500. As we have just seen, the capital you owe to your bank decreases over time : slowly at the beginning, and more quickly when the end of your loan approaches. Over time, it is therefore no longer necessary to guarantee the entire capital borrowed, since you have already repaid part of it! Again, insurance delegations often allow you to insure only the outstanding capital , thus lowering your monthly insurance payments over time and saving precious euros. Note, however, that the review of the amount of insurance on your mortgage is not done every month, but generally once a year, based on the capital remaining due on the anniversary date of your loan.
Have you ever had the opportunity to set up a delegation of insurance for a mortgage? For your main residence or for a rental investment?