Lying about your professional status, not mentioning a pathology to avoid paying an additional premium or even omitting information that did not seem important to us… Not telling the truth when filling out your borrower insurance declaration can have serious consequences. However, a difference is made depending on the good faith of the insured.
If you have taken out a mortgage, you have probably not escaped it: borrower insurance is almost a prerequisite for obtaining a loan. However, the practice of an extreme sporting activity, a very physical job or even a health problem are all factors that can penalize the borrower with the application ofa high premium for these profiles judged to be at risk. Some might then be tempted to lie by hiding information.
A lie with very serious consequences
It’s extremely dangerous, it’s really better not to lie, warns Ccile Roquelaure, spokesperson for the broker Empruntis. When you make a false declaration to the insurance, the insurer has the option of not covering your claim and not to return the dues collected. Indeed, article L113-8 of the insurance code provides for the nullity of the insurance contract if it appears that to specific questions the insured has provided deliberately misleading answers. As part of a borrower’s insurance, the insured could therefore not be covered in the event of an accident in life.
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Even more problematic, the nullity of your insurance contract can be opposed even if the incident in question has no connection with the false declarations, as provided for in the same article L113-8 of the insurance code. However, the burden of proof will rest with the insurer, who will have to demonstrate that the borrower deliberately lied in his declaration, and is therefore in bad faith.
What then are the false declarations judged intentional? On the professional plan, a person who claims to have a stable job while he is a temporary worker may be penalized, just like a person who omits to specify that he is on probation. Not declaring that you are off work when taking out the insurance can also be detrimental. Borrowers completing a health questionnaire without indicating, for example, a cardiac pathology of which they are aware may also be sanctioned.
Relief from sanctions in cases of good faith
Sometimes the borrower makes a mistake in his declaration, for example in the case where a question of the health questionnaire is not clear. Good faith can then be retained. This is the case, for example, for a member declaring himself in good health because he was unaware of the consequences possible surgical operations, which he had not been asked to declare or even in general, because an insured was not aware of the threats weighing on his health, details Richard Reek, lawyer in insurance law. You still need to fill out a health questionnaire. Since June 1, 2022, the Lemoine Law has abolished this questionnaire for all borrowers who take out a loan of 200,000 euros (per insured) provided that the loan is repaid before their 60th birthday.
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In the event that the member’s bad faith is not established, article L113-9 of the insurance code provides that the omission or inaccurate declaration on the part of the insured does not invalidate the insurance. However, if inaccurate information is observed before any claim, the insurer may either terminate the contract or maintain it by increasing the policyholder’s premium. On the other hand, if the error is observed after the claim, the indemnity is reduced in proportion to the rate of premiums paid in relation to the rate of premiums which would have been due, if the risks had been completely and accurately declared.
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But then, what happens in the case of a change in the health of the insured? Article L 113-2 of the Insurance Code provides that the insured must declare, during the course of the contract, new circumstances which have the consequence either of aggravating the risks or of creating new ones, but specifies more these provisions do not apply to life insurance, among which is borrower insurance.
Indeed, the very purpose of this cover relates to aggravations or new risks which concern both the health of the insured and his ageing. It becomes useless for the latter to have to communicate on the aggravation or the discovery of a pathology since this is precisely what the insurer initially undertook to guaranteeexplains Richard Reek.
If you decide to inform your insurer of a change in your state of health, the latter may decide to increase your premium. the opposite, you can also negotiate your contract downwards in certain casesfor example if you were a smoker and you can prove that you stopped smoking a certain time ago.
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