Unless otherwise agreed, the fire insurance covers damage caused by fire, lightning, explosion, implosion, as well as by the fall or impact of air navigation equipment or objects falling or thrown from it and by the impact of any other vehicle or animals.
When taking out fire insurance, the determination of the value of the insured property, primarily the building and its contents, is of paramount importance. This assessment is normally the responsibility of the policyholder, but both parties may agree to entrust this task to an expert, for example. Determining the correct value is a crucial step, as in most cases this value will be used as a subsequent basis for calculating the premium and, in the event of a claim, the compensation.
There is no point in overvaluing the assets, as the policyholder will pay too high a premium for compensation that will still be limited in the event of a claim. Undervaluing them is even more dangerous because the rule of proportionality comes into play. Under this rule, the compensation is limited according to the ratio between the value actually insured and the value that should have been insured.
The legislator intervened in order to avoid recourse to this dangerous rule of proportionality. Every insurer is obliged to offer its policyholders a system of setting value. If the system is correctly applied and the amounts are adapted, the rule of proportionality can no longer be taken into account.
If, at the time the fire insurance comes into force, the value of the insured building is correctly set and adjusted according to the ABEX index, the insured value of the building will still be sufficient to cover repairs or reconstruction in the event of a claim.
The insured value is adapted by linking the insured amounts to the evolution of the ABEX index, an index calculated twice a year by the Belgian Association of Experts. This index is linked to the evolution of construction prices in Belgium by monitoring the prices of building materials and labour costs in the construction sector.