By Charlotte GAUCHON
18 April 2025
Loan insurance is an essential part of taking out a property loan, but it raises a number of legal questions. Between protection for the lender, guarantees for the borrower and contractual entanglements, this insurance deserves an in-depth examination. Legal basis and anatomy of an atypical contract Loan insurance falls into the category of group insurance, defined in article L.141-1 of the French Insurance Code. This text describes it as «a contract taken out by a legal entity with a view to membership by a group of persons meeting the conditions defined in the contract». This apparently simple definition masks a complex contractual architecture that has long confused borrowers and legal experts. The Court of Cassation has had to intervene regularly to clarify the relationships between the various players. There are three parties involved in this arrangement: The insurer, who offers the risk cover The credit institution, as the underwriter The borrower, who signs up to the contract For the lay borrower, this is the most...
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