What is the risk of lying in your mortgage insurance?

If you think little lies told in the context of mortgage loan insurance do not carry risks, read this! You will have an idea of ​​the consequences, as well as the tangible and intangible costs that may arise. However, there is a trick to lower the price and we give you as a bonus the name of an actor who can help you for free.

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Health declaration for borrower insurance, a requirement of honesty

If you use a loan insurance comparator, you will find a wide range of offers, some of which will meet your expectations better than others. Most of these insurances require a health declaration. The latter is developed to allow the insurance company to clearly define your risk profile. Depending on your medical history and other criteria such as age and professional activity or your practice of sport, the insurer must determine approximately what is the risk that you will appeal to him for the reimbursement of your monthly credit payments.

This is the basis on which the mortgage insurance rate is calculated. It is in your interest to be truthful in health reporting, as failure to do so may be considered insurance fraud. A simple omission or a deliberate lie is tantamount to an act of fraud. However, you may miss some items and this is completely normal. We will come back to this in more detail later.

Consequences of a false loan insurance statement

Any borrower who is tempted to alter facts and realities in order to obtain financing should think long and hard before doing so. Several repercussions can result from this both at the level of the bank and at the level of the borrower. Here are a few as appropriate.

1. False declaration of insurance: simple oversight

You may forget to mention an operation, a treatment or even a pathology to your insurer. Don’t worry, it’s completely normal to forget. Moreover, more than half of borrowers forget certain points. In the past, you could forget for a very long time, but today the Lemoine law has restricted the period of forgetting to five years after a successful therapeutic protocol.

Therefore, when you remember an oversight in the five-year period, you just have to see your insurer and tell him about the oversight. The latter will have two choices, he will first complete your file and choose between reassessing your premium or not. But for most cases, there isn’t too much of a consequence. Either way, in the event of a reassessment, you will be notified, and then you are given the largesse to decide whether or not to accept the new premium.

On the other hand, if the insurer notices this oversight himself, he can choose, under article L113-9 of the Insurance Code, one or the other of the following 2 sanctions:

• the contract is definitively terminated within 10 days. A registered letter with acknowledgment of receipt will be sent to notify you.

• the contract is maintained with a readjustment of the insurance premium. The insured will then have 30 days to accept the new proposal or change mortgage loan insurance.

2. Intentional Misrepresentation

Intentionally perform a misrepresentation loan insurance is more than serious. Clearly, when you purposely hide certain illnesses, treatments or pathologies from your insurer, you risk being heavily penalized. It is true that lying on the health questionnaire can allow you to have a mortgage very quickly and sometimes at a very reduced price, but this is considered fraud.

Your contract risks being completely canceled if your insurer manages to prove that your declaration is erroneous or has been manipulated on purpose. In this type of situation, article L113-8 of the Insurance Code allows the insurer to keep all the premiums already collected and never to insure your credit. However, if he has already paid you some indemnities, he may ask you to pay them back. This can, by ricochet effect, lead to the total termination of your mortgage.

However, it should be noted that before compensating you, the insurer will appoint an independent expert in most cases to study the causes of the loss. The latter may therefore ask you to do medical check-ups which may turn out to be false. This obviously entails a sanction, the severity of which depends on whether the misrepresentation you made was intentional or not.

What are the most common lies people tell in their statement?

Most lies recorded in the insurance business are usually unintentional. Indeed, the most common frauds are due to the simple fact that people do not know their income or completely forget treatments they had years ago.

Another point that may surprise people is not fully understanding what a credit facility is. For example, an interest-free department store card accompanied by a credit card is considered a credit facility, even if you threw away the card years ago.

From a “health” point of view, it must also be said that some people do not know the real risk associated with a disease they have or a treatment they are following. Indeed, some do not take into account diseases such as hepatitis and others.

What should I do if I am afraid of being refused by the insurer because of my health problems?

So we have two good news for you. The first is that since September 2022 there has been a law that allows you to take out borrower insurance without a health questionnaire. The only constraint is that the insured capital be less than 200,000 euros. This is the Lemoine law. And if not, there are specialized platforms like Réassurez-moi which are experts in health risks in borrower insurance and which have negotiated dedicated contracts for this type of profile. Their service is completely free.

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