Does the borrower insurance fall under the insurance code or the consumer code? To this question, the court of appeal of Bordeaux decided on March 23 in favor of the first. A decision that, if it is a precedent, could upset the market.
Little reminder. Almost required by all banks when signing a mortgage, credit insurance protects them in case of default of the borrower in the repayment of his loan.
Clearly, if an “accident of life” strikes the borrower (disability, disability, death, loss of employment), insurance intervenes to repay his credit.
Since the implementation of the Hamon law on January 1, 2015, the borrower has a period of 1 year after the signature of the mortgage to terminate his insurance contract and subscribe a new one. The principle differs from other types of insurance that can be canceled after one year of the contract.
A terminating credit insurance at any time?
In effect for only a few months, the Hamon law could however be retried following the decision of the Court of Appeal of Bordeaux.
Following the complaint of a couple of borrowers who had been refused his request for termination of contract by his bank, the court found that the credit insurance was indeed covered by the insurance code – and not of the Consumer Code – and that it was therefore terminable at any time. A decision to be taken however in the conditional. The bank in question has already announced that it will appeal in cassation.