Borrower insurance: to get your mortgage repaid, forget the contractual termination

Have butter…and butter money? Don't think about it when it comes to insurance. As the insurance mediator relates in one of the practical cases he had to deal with this year, the guarantee Job Loss contained in your home loan insurance contract can only be activated in a very specific case. This optional protection, which can also double your contributions, usually not helpful because it only protects you in the event of redundancy. It is impossible to get your mortgage taken over by your insurance in the event of partial unemployment, the end of a fixed-term contract or resignation.

Some could therefore be tempted to find an intermediate way, like this insured. His contract specified that in the event of dismissal, he was eligible for monthly compensation from his insurer. However, in his case, it was not strictly speaking a dismissal but rather an amicable termination within the framework of a voluntary departure plan put in place by the employer. Reason why the insurer refused coverage. The individual believed that it was not a matter of a contractual termination, but of a termination for economic reasons akin to economic dismissal.


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The Court of Cassation ruled

His analysis is erroneous, recalls the insurance mediator: “The insurance contract being a random contract, the insurer cannot guarantee a risk whose realization depends on the will of the insured.” However, contractual breach is indeed the result of the will of the insured and therefore constitutes an exclusion of cover.

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Frequently, this type of dispute between individual and insurer has been settled by the highest court in the country. “The Court of Cassation has recalled on several occasions that the termination of an employment contract for economic reasons resulting from a voluntary departure within the framework of a collective agreement or a job protection plan constitutes a termination amicable agreement of the employment contract and not a termination at the initiative of the employer”, underlines the mediator.

Many conditions to fulfill

And even if you manage to activate this clause in your contract, know that its conditions of application are very strict. It is first subject to a waiting period of 6 to 12 months, during which time the clause cannot be activated. Once this period has elapsed, you are eligible for it, but you must be patient because the compensation generally only starts between 3 and 9 months after the loss of employment, or failing that, when your first unemployment benefit is paid. And do not expect to be completely exempt from repaying your credit. The coverage of the insurer varies between 30% and 80% of your deadlines. Finally, be aware that the job loss guarantee is automatically terminated once the legal age limit provided for in your contract is crossed. This ceiling varies between 50 and 65 years depending on the cover.

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