Expensive construction materials and the recent rise of natural disasters are driving up prices of fire insurance in Belgium, reports De Standaard.
Regardless of one’s insurer, the price of fire insurance in Belgium is closely tied to the ABEX index. The index aims to put a price on building a house in Belgium and is calculated on the basis of builders' wages and the price of materials.
Calculated twice a year, the current index rate has increased by 9% since last year.
Rising insurance prices
The reason behind this index increase is that the price of building materials has risen by 16% because of Russia’s war in Ukraine. Furthermore, another factor that has pushed the prices of fire insurance up is the increase in insurers’ own rates.
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Peter Wiels, a spokesperson for the insurance group Assuralia, told reporters from various Flemish media outlets that, due to an increase in natural disasters such as last year’s floods, these companies have had to raise their costs.
“There were a lot more claims to settle”, he added, “and insurers, as businesses, have to preserve a (financial) balance."
Further rises on the horizon?
Wiels also projected these prices to go up, not by 9 % as predicted by the ABEX index, but rather in relation with each person's house insurance policy.
As a result, consumers are advised to review their current insurance plan, as 1 in 3 Belgians is currently unaware of their insurance coverage.
Additionally, considering that the ABEX index is expected to rise again in January 2023, it may be worthwhile for consumers to change insurance companies. before November.
As consumer insurance costs are only updated once a year – as opposed to biennial index adjustments in January and November – consumers would benefit from a lower insurance premium based on the current index rate.