The Abex index, which affects the size of fire insurance premiums, rose to 1,004 at the end of November, an increase of almost 11% on last year.
The increase in the price of building materials will have you reaching into your wallet again in 2023, even if you do not renovate your home in any way. In fact, these prices serve as the basis for the calculation of the Abex index, which itself is used to calculate index adjustment of your fire insurance premium. This index, calculated twice a year in May and November, stood at 1.004 at the end of November 2022 against 906 in November 2021, i.e. an annual increase of 10.8%, against 5.6% last year. “This is one of the highest growths ever observed for this index”, acknowledges the president of Abex, Alain Coppe, who explains that these are essentially the prices ofsteel, from tree and insulators which pushed the index up.
Insured replacement value
In Belgium it is the new value of an item that is insured. “Insurers are obliged to update the indemnity value of their fire insurance to the cost of construction (including labor) at the time of the loss. However, they are free to transfer the increase in indemnity value to the amount of the premium. and to add one or the other financial element to it ( increase in claims related to natural disasters, higher administrative costs… Editor’s note)”, explains Alain Coppe, who estimates that 98% of insurance companies follow the index to change the size of their premium.
How much will you pay?
Specifically, if you take out fire insurance in January 2023, your premium will be 11% higher than in December 2022. current contracts are also concerned: the indexation of the size of the premium on the basis of the Abex index takes place “at the time of the annual term DKK 37.8 euros in 2023, i.e. no less than 387.8 euros annually.
“Insurers are required to discount the replacement value of their fire insurance to construction costs.”
In addition to the 10.8% increase linked to the use of the Abex index, some insurance companies index the size of the insurance premium on the basis of other elements. This is the case at AG Insurance as, “to compensate for the increase in claims in the event of natural disasterapplies an increase of 1.5%”, states Gerrit Feyaerts. The cumulative effect of these two rate adjustments implies an increase in fire insurance per 12.3% at 1eh January with the insurance company (or at the time of the contract’s annual expiry).
ING and Belfius will a priori simply use the Abex index. In the house of AxAlthough the percentage increase in fire insurance premiums has not yet been defined, the contracts “and by domino effect the premium” are adjusted to the Abex index, its spokesman Gianni De Muynck states.
“The home insurance agreement allows for the use of the Abex index. No formal decision has yet been made on other increases”, the insurance company states for its part. Ethias.
On the way to a more stable year 2023
“Growth should be less strong in 2023, but there will not be a catch-up effect.”
Building experts and architects, who meet every six months to calculate the Abex index on the basis of offers from which they select several hundred references and prices, predict a stabilization of demand and prices in the coming months. “Growth should be less strong in 2023, but there will not be a catch-up effect,” reassures Alain Coppe.
- The Abex index, which is used to calculate the size of fire insurance premiums, is rising strongly.
- Fire insurance premiums will rise nearly 11% in 2023 after rising 5.6% in 2022.
- On the question: the prices of building materials, which have increased in recent months.