Home loan insurance is a significant portion of the total cost of your credit, typically 10-20%, but this rate can be higher if you are considered “at risk.”
In this context, how can we compare the different insurance quotes with each other and be sure to make the best choice, both in terms of the guarantees offered and the price offer? We give you the procedure to follow.
Step number 1: use online comparators
In order to have access to a wide choice of mortgage insurance, do not hesitate to use online comparators. Practical, reliable, free and without obligation, they allow you to receive several quotes in just a few clicks.
By putting insurers in competition, you have easy access to the best offers on the market and quickly see the guarantees, exclusions, coverage rates and of course the proposed rates.
Step number 2: compare offers of the same level
For your comparison to be reliable and meaningful, it is necessary to compare quotes that offer the same level of guarantee. It is therefore necessary to know in advance which guarantees you need and which you do not want.
Here are the mandatory guarantees of the borrower insurance contract:
- Death: loan maturities are reimbursed if the borrower dies before the end of his mortgage
- PTIA (Total Irreversible Loss of Autonomy): assimilated to death for the insurer, this guarantee allows the total reimbursement of your mortgage loan maturities
- Disability: loan maturities are partially or totally covered in a recognized case of disability (note, coverage rates may vary depending on the contract
And here are the optional coverages frequently offered, check before purchasing them that they apply to your personal situation:
- Loss of employment: it is advisable to check the conditions of loss of work, the waiting periods, the amounts and duration of support
- ITT (Temporary Incapacity for Work): to be checked in the same way as the loss of employment guarantee
Step number 3: use the delegation of insurance thanks to the standardized information sheet
Since the Lagarde law, you have the possibility of choosing the loan insurance of your choice, provided that the guarantees offered by the insurance delegation are at least equivalent to those offered by the lending institution.
Your banking institution must give you the FSI (Standardized Information Sheet. This reminds you of your rights in terms of free choice of borrowing insurer, but also provides you with all the useful information.
In fact, this sheet must mention the following characteristics:
- Details of guarantees
- Minimum coverage criteria required
- The insurance portion (100% if you borrow alone or a different distribution if you borrow with two)
- The cost of loan insurance: the monthly contribution (or the minimum and maximum for declining contributions), the total cost of the insurance, the TAEA (Global Effective Annual Rate of Insurance)
Thanks to this document, your comparison task is made easier since you have a clear basis for the minimum borrower insurance contract you need, as well as the insurance prices.
Step number 4: be vigilant to the limits of the contract
Home loan insurance must be chosen with the greatest care, because it covers you for the entire duration of your mortgage, or 18 years on average. Each insurer imposes its own limits of coverage.
Here are the points you should consider before purchasing your contract:
- Warranty exclusions: they most often relate to risky jobs, risky leisure activities (parachuting, scuba diving, car and motorcycle rallies, etc.), back pathologies
- Guarantee ceilings implemented for triggers other than death
- The franchise period (period during which you are not supported despite the fact that the facts have been established)
- The waiting period (period during which the guarantees do not apply despite the effective implementation of the contract)
Should You Take A Broker To Compare Home Loan Insurance?
As we have seen, mortgage loan offers take many parameters into account and can seem complex to the borrower. Be aware, however, that spending a few hours of your time comparing different quotes is far from a waste of time. Indeed, it is several thousand euros of savings in prospect that you can benefit from.
However, it is sometimes preferable to call a broker in certain situations, in particular in the event of exclusion of guarantees. This one will accompany you in your research and will present you several insurance contracts corresponding to your specific needs.