Home Loan Insurance RatesHousing Loans Insurance Rates
If you have a hypothecary for your home in France, the lender will require that you have household insurance to protect your belongings against losses and damages.
When your real estate is an dwelling, the communal areas of the premises are protected by another joint ownership or partnership insurance contract. However, you are still obliged to take out insurance for your personal part of the premises. In the case of newly built or already built real estate in France, you must have your own household insurance before concluding the purchase contract with the notary.
From a technical point of view, it is unlawful for the notary public to have signed a contract concerning an unsecured asset. In France, the costs for household insurance are quite low and the insurance can be introduced quite quickly, if necessary within one workday. Will I need to take out insurance for my mortgage in France?
They don't believe in abandoning debt when you leave. Every bank in France needs a lifetime insurance associated with your hypothec. In the event of your decease, the insurance company pays the remainder of the amount of the mortgage. If there are several borrower, this insurance can be divided between the borrower, usually in relation to the income generated.
Example, with a buying of 200.000 - if one pays 40.000 in the pair and the other 60.000, the insurance could be divided to 40% - 60%. In the event of his/her decease, the first would be insured for 80,000 (40% of the loan value) and the second for 120,000 (60% of the loan value).
In this case, if the first individual had passed away, 40% of the remainder of the loan would have been refunded. However, some customers opt for 100% insurance for each debtor, so that the total amount outstanding on the loan is paid back in the event of the deaths of one of the parties. The majority of financial institutions in France provide group insurance, which is often the cheapest one.
In order to be eligible for insurance, you must fill out a medical form so that the insurance provider can evaluate whether you are eligible for the default group rates or whether you have medical problems that may require an insurance rate up. It is a default for all borrower in France, including inhabitants, and there are dedicated test centres funded by insurance firms in large towns in France.
Often, if one individual in the pair has a medical condition or is hard to cover, we can arrange a higher percentage of cover on the other individual to prevent a supplement to the insurance premiums. In some cases it may also be possible to obtain a non insurance policy without a loan, e.g. if your deposit is at least 40% or if you are willing to repay a slightly higher interest will.
How do I begin to pay the insurance policy? Insurance premium is debited either with the first instalment of the loan, but often as soon as the borrower accepts your proposal. Please be aware that this is before the purchase contract is actually concluded with the notary.
Unless you specify otherwise, the insurance provider debits your banking details directly, usually on a quarterly base. When you repay your premature french hypothec, you can terminate your insurance.