Fire insurance
for your home

Home insurance, more commonly known as fire insurance in Belgium, is used to cover goods such as buildings, buildings or houses but also things.

Part 4 of the law of April 4, 2014 on insurance determines what is the “normal guarantee” of fire insurance. Understand by normal, what a fire insurance must cover at least without additional guarantee.

Unless otherwise agreed, the fire insurance guarantees the insured goods against damage caused by:

• the fire;
• lightning;
• the explosion;
• implosion;
• the fall or collision of air navigation devices or objects that fall or are thrown from them;
• collision with any other vehicles or animals.

Home insurance is not compulsory for the owner of a property except if the same property is located in a condominium. Indeed, he must cover himself to guarantee the damage which could occur in the co-ownership following an incident at his place.

The owner (or co-owner, see usufructuary or bare owner) can however take out insurance which covers him against any risk of deterioration of his property. On the other hand, a tenant from any region of Belgium has the obligation to insure the property he is going to rent.

Moreover, in all property rental contracts it is stipulated in the lease that fire insurance must be taken out by the future tenant at the time of signing the lease.

Minimum conditions are imposed by the royal decree on fire. They relate more to the terms and conditions of property coverage than to the perils that must be insured.

Let’s see in detail what the different guarantees of fire insurance (home) cover:

The fire guarantee

It must cover damage caused by fire, explosion or implosion as a result of terrorist attacks and industrial disputes;

The explosion guarantee

It must cover damage to property due to:

• An explosion or implosion not directly related to the insured risk (occurring outside the risk). For example an explosion in the street;
• The explosion of explosives, the presence of which within the insured risk is not inherent to the professional activity carried out there.

The storm guarantee

This warranty covers:

• damage caused by hail, pressure from snow or ice;
• up to 100% of the capital insured on the building and its contents

Water damage guarantee

The guarantee covers up to 100% of the insured amounts whether this concerns the building or the contents. This means that the insured must be compensated up to the amount you have insured.

Third party recourse guarantee

It generally covers a minimum of € 619,733, indexed to what concerns damage to property. This corresponds to the minimum threshold of coverage in a contract.

Note : this minimum “third party recourse” guarantee therefore does not concern bodily injury;

The civil liability guarantee

This specific guarantee must cover at least the following amounts:

• € 12,394,676 (indexed) for bodily injury;
• € 619,733 (indexed) for damage to property.

In the fire insurance, cover for other perils has been made compulsory in what are called simple risks such as:

• Storm-hail-snow (since 01/10/1995 – cf. royal decree of 16 January 1995);
• Natural disasters (since 03/01/2006 – cf. law of September 17, 2005, incorporated into article 123 of the law of April 4.

This guarantee necessarily covers:

• floods;
• earthquake ;
• landslides and subsidence (natural) of land;
• overflows or back-ups of public sewers.

The following guarantees are subject to minimum conditions, but are not mandatory guarantees:

• Water damage;
• Third party remedies;
• Civil Liability Building

Please note that it is important to distinguish between simple risks and other risks called special risks. Indeed, they are not covered in the same way.

• The insurer must take into account:
  • the minimum conditions provided for by the Royal Fire Decree of 24 December 1992;
  • legally binding guarantees imposed by other legislation (such as storm and natural disaster coverage);
• the insurer cannot apply the proportional rule in certain cases;
• the duration of the contract is limited to a maximum of one year, renewable by tacit renewal;
• arbitration clauses are prohibited;
• the insurer, which reserves a right of termination in the event of a claim, must grant the same right to the policyholder.

These rules which protect consumers therefore do not apply to risks other than simple risks. In special risks, the insurer therefore has more contractual freedom.

“Fire” insurance (regulating fire and other perils, with regard to simple risks) applies to insurance contracts which mainly cover simple risks against damage caused by one of the perils listed. by the royal decree and the related responsibilities.

We can conclude that in practice, this royal decree “Fire” is applicable to all fire insurance with regard to simple risks, because these fire insurances systematically cover several of the perils cited by the royal decree, starting with fire and related perils.

In Indexation, a distinction must be made between legal indexing and contractual indexing. We will go through these two possibilities.

Legal indexation

The legislation provides for indexation on the basis of:

• Changes in consumer prices (cf. AR Incendie) with regard to the minimum amounts to be insured against third parties and RC Immeuble.
• The basic index is the 119.64 index for December 1983.
• The ABEX index, base 375, for the amounts taken into account to define a simple risk. (cf. Royal Decree of December 24, 1992 – 2.4.2.3).

Contractual indexation

The ABEX index is generally applied for indexing:

• of the insured amounts, with regard to:
  • the content and the building;
  • rental or occupant liability;
• the premium, which is proportional to the amounts insured.

The starting index is that of application at the time of the subscription of the contract, indicated in the special conditions.

The index tracks the evolution of construction prices (price of materials and cost of labor). It is determined twice a year (every semester) by the Belgian Association of Experts.

The contract may provide for the application of indexation on the basis of an index other than the ABEX index, but this practice is exceptional in simple risks. The policyholder is not obliged to index the insured amounts and the premium, but without indexation, underinsurance is inevitable unless the insured amounts are regularly adjusted.

In the Walloon region

In the Walloon region, the tenant is legally obliged to ensure his contractual liability in the event of fire since September 1, 2018. Unless the parties agree otherwise, the tenant must have taken out this liability insurance before entering the premises. . He must prove the payment of the premium annually. Failing this, the lessor may add to his home insurance a waiver of recourse against the lessee and pass the additional premium on to the lessee (decree of March 15, 2018, article 17).

In the Flemish region

In the Flemish region, the tenant must cover his contractual liability in the event of fire, but also in the event of water damage. He can do this by taking out his own insurance or by compensating the lessor for the additional costs (the surcharge) of the abandonment of recourse in his fire insurance. This decree also requires the owner-lessor to insure his contractual liability with regard to the lessee. The contractual liability of the lessor on the basis of article 1721 of the Civil Code is generally automatically covered by the additional guarantee “tenant recourse” of the owner’s fire insurance (decree of July 14, 2017, art. 29).

Following what we have just explained you will understand that the price of your fire insurance is personalized and depends on several factors which are in particular:

• whether you are a tenant or owner;
• whether you are the main occupant or not;
• the number of facade;
• the age of the building;
• the number of rooms;
• the type of good and its use.

Indeed, whether it is an apartment or house rental considered as simple risks or so-called special goods (pharmacy) the risks taken by the insurer are not the same in terms of compensation. Several elements can affect the risk:

• the geographical location of the property;
• the area of ​​the property;
• the content of the property, for objects of a certain value, in particular paintings or works of art, they may be covered separately.

Once the risk has been estimated, several hedging options are possible

• ensure that the building;
• insure the building and the contents;
• insure the building, contents and theft. When you choose the latter option, the contents are generally insured up to 50% in the event of theft.

On the other hand, exterior fittings are covered in all formulas.

Important details to note :

• The things (contents) are always insured at replacement value, that is to say in return value;
• The guarantee of your home insurance also extends to the insurance of your holiday kot, for more serenity;
• Insurance discounts with certain insurers are possible, in particular for new constructions and in the event of an approved system against theft (alarm);

At an additional cost, you can also take out legal protection insurance. This additional insurance is used to defend your interests in the event of conflicts.

In the event of termination there are several situations:

• If you move or sell your property, the risk disappears, the inventory or the deed of sale will suffice for you to terminate your insurance on the date of your departure;
• In all other cases, termination will be made at the end of the contract (anniversary date of the contract) for this you must inform the insurer in advance 3 months before the expiry date.

In both cases, it is necessary to send your mail with acknowledgment of receipt. Note that the authentic date for the insurer is the date of the day following the deposit of the registered letter in the post.

The main rules concerning goods insured at replacement value apply unless otherwise agreed as follows:

The 80% rule

The insurer must compensate at least 80% of the replacement value (excluding tax), where applicable after deduction of obsolescence.

In the event of non-reconstruction or non-reconstruction of a damaged property, insured at replacement value, the insured has the right to:

• a minimum compensation of 80% of the replacement value, exclusive of tax (without VAT);
• after deduction, where applicable, of obsolescence and excess and application of the proportional rule.

This corresponds to a minimum of 80% of the fixed compensation (excluding taxes). The insurer can of course pay more. In practice, in the absence of an invoice, small claims are often compensated at 100% of the replacement value, excluding taxes. In the event of reconstruction or reconstitution after compensation, the insured has the right to request the unpaid balance.

He must do so within three years of receiving compensation (limitation period).

The 30% rule

If the age is greater than 30%, it can be deducted from the replacement value (= 20% with regard to the peril of storm, hail, pressure from snow or ice). This corresponds to compensation in real terms.

In such a case, the real value “may” therefore be compensated (= replacement value minus the percentage of obsolescence). If the obsolescence exceeds 30%, the insurer is therefore not obliged to compensate the real value. For this reason, some insurers only deduct obsolescence greater than 30%! In the event of partial damage, the percentage of obsolescence is applied to the damaged part.

The other important rules are intended to speed up claims management :

• The expertise (fixing the damage) must be carried out within strict deadlines;
• In principle, the compensation must be paid within 30 calendar days of the end of the expertise.

The legislation provides for some exceptions to this rule.

The Royal Decree on Fire initially provided for the application of a legal deductible for damage to property. The legal deductible has been abolished.

Consequently, insurers are free to determine the amount and terms of any deductible. As a general rule, the contractual deductible is:

• indexed on the basis of the consumer price index;
• deducted from material damage;
• after the application of reversibility of capital;
• before the application of the proportional rule. Given the contractual freedom, other modalities are possible.

Thus, some insurers apply a threshold deductible (English deductible). The damage is in this case fully compensated, beyond a determined amount.

Compensation calculation

The indemnity is equal:

• the amount of the damage;
• minus the amount of any contractual deductible. The deductible is generally deducted before the application of the proportional rule of the amounts and, consequently, of the possible reversibility of the insured capital.

Calculation of the minimum indemnity

In principle, the indemnity cannot be less than 100% of the insured value. For example 100% of the actual value, value of the day, agreed value. This principle does not prevent the application of the provisions of the law which make it possible to reduce the indemnity, such as the proportional rule. The legislation provides for an exception for goods insured at replacement value with regard to simple risks. The insured replacement value is not necessarily indemnified.

What are the compensation periods?

In simple risks, the fire insurer is required to respect strict deadlines to settle the claim. Thus we distinguish:

• Relocation costs (temporary accommodation) and basic necessities must be paid within 15 days of the date of proof that they have been incurred;
• The part of the indisputably due compensation established by mutual agreement must be paid within 30 days following this agreement;
• In the event of a dispute: the appraisal or the damage assessment must be closed within 90 days of the date on which the insured informed the insurer of the appointment of his expert;
• the compensation must be paid within 30 days of the end of the expertise or, failing that, of the determination of the damage. If the insurer does not respect the stipulated payment deadlines, it is legally bound (= without formal notice) to pay double the legal interest on the unpaid part.

Article 75 of the Law of April 4, 2014 relating to insurance does not oblige the insured to take measures to avoid the occurrence of a claim, but to “prevent and mitigate the consequences of the claim”.

The obligation provided for in this article therefore only exists when a disaster occurs or is imminent and not before. Insurers can nevertheless impose “contractual” preventive measures. These measures are numerous with regard to risks which do not correspond to the concept of simple risks, “special risks”.

Example : place automatic and / or non-automatic fire extinguishers. These contractual prevention measures can have an impact on:

• acceptance of risk;
• the pricing structure ;
• settlement of the claim.

In the event of non-compliance with an obligation imposed on the contract, the insurer may have provided for an exclusion of cover or a forfeiture of the insured’s right to benefits if the breach is causally related to the loss.