Loi Bourquin : Optimize Your Borrower’s Insurance Annually – BTS Insurance Course
In summary
| Section | Description |
|---|---|
| 📜 Introduction | The Bourquin Law, an amendment to the Sapin 2 Law introduced in 2017, allows greater flexibility in managing borrower insurance with an annual review of contracts. |
| 🔍 Principle of the Law | Extends the possibilities offered by the Hamon Law of 2014, allowing borrowers to change their borrower insurance annually on the contract anniversary date. |
| 🛡️ Guarantee Conditions | New insurances must provide guarantees at least equivalent to the previous ones to protect borrowers against risks such as death, disability, etc. |
| 📅 Termination Mechanism | The borrower must notify their intention to change insurance two months before the loan anniversary, accompanied by an equivalence certificate of guarantees. |
| 💸 Economic Advantages | The law potentially enables significant savings by putting insurers in competition and adjusting coverages to personal needs. |
| 🏠 Eligibility and Impact | Accessible to all individuals who have taken out a mortgage loan, affecting millions of French people who can optimize their budget by comparing offers annually. |
| 🔧 Flexibility and Adaptability | Allows borrowers to customize their insurance based on changes in their personal situation. |
| 📝 Notification Procedure | Requires formal written notification, often via registered letter, to ensure documentation and traceability of the change request. |
| 🌟 Importance of the Insurer Selection | Essential to choose an insurer offering competitive rates and reliable guarantees to maximize the benefits of the law. |
The Bourquin Law, officially introduced through an amendment to the Sapin 2 Law in 2017, represents a significant advancement for French borrowers. This regulation allows for increased flexibility in managing borrower insurances, offering the possibility to review contracts annually.
Principle of the Bourquin Law
Context and Evolution of Borrowers’ Rights
The Bourquin Law, officially the Bourquin Amendment, is a natural extension of the 2014 Hamon Law. The Hamon Law marked a first step toward making borrower insurance more flexible by allowing new borrowers to change their loan insurance within the first 12 months after signing their mortgage. However, this limited window left little room for ongoing reassessment amid evolving insurance market conditions.
Extension of Annual Cancellation Rights
The Bourquin Law addresses this limitation by granting borrowers the right to change their borrower insurance every year. This annual cancellation right applies on the contract anniversary date, allowing for a systematic and periodic reassessment of insurance conditions based on changes in the borrower’s personal situation or more advantageous competing offers.
Guarantee Conditions of Equivalence
A key aspect of the Bourquin Law is the requirement that the guarantees in the new insurance contract be at least equivalent to those of the current contract. This condition ensures that the borrower remains adequately covered against risks such as death, disability, incapacity to work, or illness, without decreasing the level of protection. To establish this equivalence, borrowers and new insurers must compare covered guarantees, exclusions, waiting periods, and other important contract factors.
Rescission Mechanism and Consumer Impact
To implement this rescission, the borrower must notify their current insurance provider and bank of their intention to change insurers, respecting a two-month notice period before the loan anniversary date. This notification must be accompanied by an equivalence certificate of guarantees from the new insurer, which may require obtaining advice or using brokerage services to ensure compliance.
Economic and Personal Benefits
The impact of this law on personal finances can be significant, as it allows borrowers to benefit from better conditions and potential cost reductions offered by insurer competition. By enabling annual reassessment, borrowers can adjust their insurance coverage to better suit their evolving life situation, such as health changes, professional transfers, or family circumstances, while optimizing associated costs of their mortgage.
Who can benefit from the Bourquin Law?
Extended Eligibility for Mortgage Borrowers
The Bourquin Law is accessible to all individuals who have taken out a mortgage loan. This legal provision is designed to encompass a wide range of borrowers, from first-time buyers to experienced investors, and applies to any type of mortgage loan intended for the purchase of a primary residence, secondary residence, or rental property.
Potential Impact on Millions of French People
In France, access to homeownership is a key step in building wealth for many households. With nearly eight million households having taken out a mortgage in 2017, according to the Credit Observatory, the impact of the Bourquin Law is potentially vast. Each borrower with an existing mortgage can, from the year after signing their loan and on each anniversary, reconsider their borrower insurance contract.
Advantages of Annual Insurance Optimization
This law enables borrowers to compare mortgage insurance offers annually. The main benefit is financial: by introducing competition among insurers, borrowers have the opportunity to reduce their insurance costs. This can lead to substantial savings over the total loan duration, improving their budget management.
Flexibility and Adaptability
Beyond economic benefits, the Bourquin Law offers flexibility, allowing borrowers to adapt their insurance to their personal circumstances, which can evolve over time. For example, health improvements, career changes, or family status modifications can justify adjusting coverage to better reflect current risks.
Application modalities of the Bourquin Law
Respect for the Cancellation Notice Period
One fundamental element to benefit from the Bourquin Law is respect for the two-month notice period. This means that the borrower must inform their current insurer and bank of their intention to change borrower insurance at least two months before the contract’s anniversary date. This prior notification is crucial to allow all involved parties to prepare and adjust necessary details before implementing the new insurance contract.
Guarantee Equivalence
To be accepted as a replacement, a new insurance contract must offer guarantees at least equivalent to those of the initial contract. This guarantee equivalence ensures the borrower remains adequately covered against the same risks as before, such as death, disability, incapacity to work, and serious illnesses. This assessment will generally be performed by the bank, which will verify that the new contract meets the minimum initial criteria.
Notification Procedure
The change notification must be made in writing, often via registered letter with acknowledgment of receipt. This formal requirement officially documents the request and ensures traceability. The borrower must include in their notification details of the proposed new contract, as well as an attestation of guarantee equivalence provided by the new insurer.
Bank Approval
Once the notification is received, the bank will examine the new contract to ensure it meets all coverage conditions. If the bank is satisfied with the guarantee comparison, it will approve the change. If refused, it is obliged to justify its decision, giving the borrower the opportunity to understand the reasons for the refusal and take appropriate measures to address them.
Importance of the Insurer Choice
It is essential for the borrower to choose an insurer not only offering competitive rates but also recognized for the quality and reliability of its guarantees. Using online comparison tools or working with insurance brokers can be effective ways to find the most suitable contract under advantageous conditions.
Advantages of the Bourquin Law
Reduction of Insurance Costs
The main advantage of the Bourquin Law is the ability it offers borrowers to significantly reduce their insurance costs. By allowing borrowers to renegotiate their mortgage insurance annually, the law creates a competitive mechanism where insurers are encouraged to offer more favorable rates to attract or retain clients. This can lead to substantial savings over the total duration of the loan, potentially amounting to thousands of euros, depending on the initial loan amount and term.
Improvement of Financial Accessibility
The savings achieved through the possibility of changing borrower insurance help households better manage their budgets and allocate their financial resources to other needs or investments. This improvement in financial accessibility can be especially beneficial for young borrowers and families seeking to maximize their purchasing power while securing their real estate investment.
Customization of Insurance Coverages
Another notable benefit of the Bourquin Law is the ability for borrowers to personalize their insurance coverage according to changes in their personal situation. Whether a change of profession, health improvements, or modification of financial needs, borrowers can adjust their guarantees to better suit their current risk profile, ensuring they pay only for what they truly need.
Stimulates Competition and Improves Services
The increased competition among insurers is not limited to price reductions. It also encourages insurance companies to improve the quality of their services and innovate in terms of offered products. Borrowers thus benefit from more transparent contracts, clearer conditions, and an improved customer experience, as each insurer seeks to differentiate itself from its competitors.
Enhanced Consumer Protection
Finally, the Bourquin Law strengthens consumer protection by giving them more control over their mortgage insurance. It balances the powers between borrowers and financial institutions, reducing tied selling practices often observed in the banking sector where borrowers were sometimes forced to accept insurance proposed by the lending bank without options for comparison.
Comparison Table Before and After the Bourquin Law
| Year of Subscription | Rescind Options Before the Law | Rescind Options With the Law | Notice Period Required | Potential Savings |
|---|---|---|---|---|
| Before 2017 | Rescission only in the first year (Hamon Law) | Annual rescission at each anniversary date | 15 days (Hamon Law) | Limited after 1 year |
| 2018 and after | – | Annual rescission at each anniversary date | 2 months before the contract anniversary | Potentially high each year |
Example of using the Bourquin Law
Let’s consider Claire, a young professional who bought her first apartment in Lyon in January 2018, taking out a 200,000-euro mortgage over 20 years. At the time of signing her loan, her bank proposed borrower insurance costing her 50 euros per month, totaling 12,000 euros over the loan term.
Initial situation :
- Loan subscription date : January 2018
- Monthly insurance cost : 50 euros
- Loan duration : 20 years
After one year, in January 2019, Claire discovered that she could potentially save on her insurance thanks to the Bourquin Law, which allows her to review her insurance contract each year on the contract anniversary date.
Claire’s action :
- Date : November 2018
- Approach : Claire begins comparing available borrower insurance offers on the market. She finds an offer with equivalent guarantees but at 35 euros per month, representing significant savings over the remaining duration of the loan.
Change process :
- Notice period : Claire sends a rescission notification to her current insurer in November 2018, respecting the two-month notice before the loan’s anniversary date.
- Documentation : She provides her bank with an attestment of guarantee equivalence offered by the new insurer.
- Validation : The bank examines the offer and confirms guarantees are equivalent. It approves the insurance change.
Result :
- Savings achieved : By switching insurers, Claire reduces her monthly insurance cost by 15 euros. Over the remaining 19 years of her loan, she will save approximately 3,420 euros (15 euros saved each month x remaining 228 months).
Transition to the Lemoine Law
Context of Legislative Evolution
Although the Bourquin Amendment was a major step forward in insurance flexibility, the Lemoine Law, adopted in 2022, marked a new stage in enhancing borrowers’ rights in France. This law represents a natural progression towards even greater freedom for consumers in managing their mortgage insurance.
Rescission at Any Time
The main innovation introduced by the Lemoine Law is the ability for borrowers to rescind their borrower insurance at any time after the first year of subscription, without the need to respect a notice period. This ease of cancellation radically changes the landscape, as it removes the obligation to wait for the contract anniversary to make a change. Borrowers can thus act more quickly in response to market fluctuations or personal situation changes that prompt them to seek better conditions or rates.
Maintenance of Guarantees of Equivalence
Like the Bourquin Amendment, the Lemoine Law stipulates that new insurance offers must provide guarantees at least equivalent to those of the ongoing contract. This condition ensures that the security of the borrower is not compromised when changing providers. It maintains a certain rigor in selecting new offers, ensuring that savings are not achieved at the expense of coverage.
Increased Benefits for Borrowers
This law provides a greater freedom and new savings opportunities for borrowers, enabling them to more actively and more frequently benefit from insurer competition. The Lemoine Law can significantly help reduce insurance costs for many borrowers, especially those in good health or with improving risk profiles over time.
Market Impact of the Law
The introduction of the Lemoine Law is likely to energize the borrower insurance market, encouraging companies to continually improve their offers to attract and retain clients. This could lead to an overall enhancement of offered conditions, both in terms of price and coverage, benefiting all consumers.
Conclusion
The Bourquin Law marked an important step towards more freedom and savings for borrowers. With the implementation of the Lemoine Law, options to optimize mortgage insurance become even more accessible, encouraging consumers to actively seek the best offers available on the market.
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