Insurance APR (TAEA)
The insurance-only counterpart of the APRC, isolating the cost of borrower insurance. It exposes the weight of insurance within the credit and makes it easy to compare the bank's group contract with an external delegation. On a long loan, insurance can be a major share of total cost.
Key points
- Expresses the annual cost of borrower insurance as a percentage of the borrowed capital.
- Enables like-for-like comparison between the bank's group contract and an external delegation.
- On a long-term loan, a high insurance APR can add tens of thousands of euros to total cost.
- Disclosure of the insurance APR is a legal requirement appearing in the standardized information sheet.
Frequently asked questions
How do you use the insurance APR to convince a client to delegate their insurance?
The bank's group contract insurance APR is often two to four times higher than that of an external contract with equivalent cover. By projecting that gap over the full loan term, the broker makes a potential saving of several thousand euros concrete, which makes delegation far more tangible than comparing mere monthly premiums.
Why is the insurance APR more useful than the monthly premium when comparing insurance offers?
The monthly premium varies with the outstanding capital for some contracts and stays flat for others, making direct comparisons misleading. The insurance APR converts the cost to an annual percentage of the initial capital, providing a common basis independent of the premium calculation method.
What is the difference between the insurance APR and the APRC?
The APRC is the overall cost of credit including all mandatory costs, including insurance. The insurance APR extracts the insurance component alone to make it visible and comparable in isolation. Both indicators are complementary: the APRC gives the total cost, the insurance APR reveals how much of that total comes from insurance.
In practice
On a €250,000 loan over 20 years, a bank group contract insurance APR of 0.36% versus 0.12% for an external delegation represents a saving of around €12,000 over the full loan term, a concrete argument the broker can present at the first simulation.
Put it into practice with CourtImmo
See how CourtImmo software helps brokers on this topic:
Official sources
- Decree no. 2014-1190 (TAEA calculation) · Légifrance
- The annual percentage rate (APRC) · Service-Public.gouv.fr
- Borrower insurance for a mortgage · Service-Public.gouv.fr