$15 Billion in Insurance Refunds Unclaimed: Are You Missing Out?

When you take out a loan, you’re also required to purchase what’s known as borrower’s insurance. This insurance serves as a safeguard for both you and the lending institution, covering all or part of your loan repayments if you’re unable to make them due to reasons such as death, loss of autonomy, disability, incapacity to work, and sometimes unemployment. This insurance can be quite costly, especially in the case of a mortgage where it can amount to hundreds of dollars each month. But did you know that in certain cases, you could actually request a refund of your borrower’s insurance premiums?

To understand this, we need to go back to the 1990s. At that time, insurance companies, with the approval of public authorities, decided to overestimate risks and thus increase the amount of the premiums. However, according to article L331-3 of the Insurance Code, insurers are required to return a portion of this excess premium to their clients. Insurers have logically earned interest on these margins through investments. These are also several billion dollars that have not been claimed. In 2007, UFC-Que Choisir initiated a legal procedure and the courts confirmed this obligation. In reality, very few institutions have complied. According to figures from the organization Action Civile, for a 20-year mortgage of 200,000 euros, a borrower could expect to recover up to 3,000 euros. However, certain conditions must be met to be eligible for this refund.

The first condition relates to the date the loan was taken out. To be eligible for this refund, the mortgage must have been taken out between 1996 and 2005, and consumer loans between 1997 and 2007. The second condition is that the claim must be made within two years of the end of the loan term. After this period, it is too late. Lastly, and perhaps most critically, only insured individuals who have not filed any claims are eligible for this refund. For instance, if you were ill for several months and unable to pay your installments, thereby relying on the insurance to cover them, you would not qualify for the legal obligation of a refund.

Think you meet all these criteria? If you decide to pursue individual action, it’s crucial to engage a lawyer, which involves investing a certain amount of money for an uncertain outcome. Alternatively, you could join a class action lawsuit, such as the one initiated by Action Publique in 2016.