The distinction between home insurance and borrower insurance remains unclear in many consumer guides, even though these two contracts adhere to distinct legal and actuarial logics. Their interplay, however, determines the actual level of protection for a property, from financing to occupancy.
Natural disaster surcharge: what changes concretely in MRH contracts
A decree dated December 22, 2023, has raised the natural disaster surcharge applicable to property damage contracts. Since January 1, 2025, this surcharge has increased from 12% to 20% of home insurance premiums. For car insurance contracts, the rate has risen from 6% to 9%.
This increase is not trivial. It reflects the desire to rebalance the CatNat regime, which is structurally deficit. Concretely, on an MRH contract with an annual premium of a few hundred euros, the portion dedicated to natural disasters increases significantly, without the insured being able to opt out.
We observe that this regulatory increase is compounded by the inflationary trend in premiums. Assurland.com notes an average increase in home insurance rates of 13% between 2025 and 2026, with marked regional disparities. Nouvelle-Aquitaine, Bourgogne-Franche-Comté, and Grand Est are the most affected areas due to their exposure to climate hazards.
To delve deeper into pricing mechanisms and the different types of property coverage, insurance on Bulle Immobilière details the parameters to monitor when subscribing.
Borrower insurance: share, waiting periods, and Lemoine law
Mortgage insurance covers the repayment of the remaining capital in the event of death, total permanent disability (TPD), partial permanent disability (PPD), total temporary incapacity (TTI), or job loss. The central question during subscription remains the distribution of the share between co-borrowers.
A share of 100% for each borrower offers maximum coverage but doubles the cost. Opting for 50/50 reduces the premium but exposes the surviving co-borrower to having to cover half of the monthly payments. We recommend adjusting the share based on the income differential between borrowers rather than a default symmetrical split.
Waiting period and franchise period
These two concepts are often confused. The waiting period refers to the period after subscription during which no guarantee can be activated. The franchise period, on the other hand, runs from the occurrence of the claim: the insurer only takes over once this period has elapsed.
- The death guarantee rarely has a waiting period, except in the case of suicide during the first year of the contract.
- The TTI guarantee generally includes a franchise period of 90 days, aligned with the social security regime.
- The job loss guarantee, when it exists, often combines a waiting period of several months with a comparable franchise duration.
Mid-term cancellation and Lemoine law
Since the Lemoine law, any borrower can cancel their loan insurance at any time, without waiting for the anniversary date. This ability has opened up insurance delegation to broader competition, but the effective substitution rate remains moderate. Many borrowers do not compare guarantee conditions beyond the sole criterion of the rate.
The DGCCRF monitors the practices of lending institutions that hinder substitution. Checking the equivalence of guarantees required by the bank is the first step before any cancellation.
MRH guarantees: exclusions that insured parties discover at the time of a claim
The multi-risk home insurance contract generally covers fire, water damage, theft, glass breakage, natural and technological disasters, storms, and electrical damage. This standard list conceals frequent exclusions.
- Professional goods stored at home are not covered, unless there is a specific extension in the contract.
- Valuable items are capped, sometimes at a very low percentage of the insured movable capital.
- Neglecting maintenance of the home (unrepaired plumbing, aging roof) can justify a refusal of coverage, even for a classic water damage claim.
- Damage caused by a pet falls under private civil liability, not property damage coverage.
We recommend reviewing the exclusion clauses before any claim, not after. The information notice, attached to the contract, details the conditions for activating each guarantee.
Integrating home insurance and borrower insurance in a real estate project
Home insurance protects the physical property and the occupant’s liability. Borrower insurance protects the repayment of the loan. These two coverages do not substitute for one another, but they interact at a specific moment: the occurrence of a serious claim that renders the property uninhabitable while preventing the borrower from working.
In this scenario, the MRH compensates for material damages (reconstruction, temporary relocation) while borrower insurance covers the loan payments through the TTI or TPD guarantee. If either one is under-dimensioned, the remaining financial burden can jeopardize the entire wealth project.
The budgetary arbitration between these two items deserves to be considered holistically. Reducing the MRH premium by accepting high deductibles may seem rational, but a significant claim with a deductible of several thousand euros, combined with a TTI franchise period of 90 days on the loan, creates a period of real financial vulnerability. It is better to calibrate both contracts together, taking into account the debt ratio and available precautionary savings.
