Indemnity insurance
- An insurable interest is required
- An excess is customary
- The insurer can recover from the party at fault
- Underinsurance leads to a lower payment
Which two types of insurance are there?
The Dutch Civil Code divides insurance into two main forms: indemnity insurance and fixed-sum insurance. That distinction determines how large a payment may be.
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In brief
Title 17 of Book 7 of the Dutch Civil Code has two main forms. With non-life insurance the insurer pays what you have actually lost. The payment may not put you in a better position than before the loss. That indemnity principle is laid down in Article 7:960 of the Dutch Civil Code. Buildings, home contents, motor, travel and liability cover all fall into this group.
With a fixed-sum insurance you agree an amount in advance that is paid as soon as the event occurs, regardless of the actual loss. Term life, personal accident and funeral insurance work that way. In everyday speech you will also hear a second division: general insurance versus life insurance. That follows the licences under the Dutch Financial Supervision Act, because a general insurer and a life insurer are separate companies.
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The two forms side by side
Two legal forms and a third division you come across in practice.
Fixed-sum insurance
Pays an amount agreed in advance.
- The amount is unrelated to the loss
- Medical underwriting is customary
- The beneficiary is named on the policy
- Several policies can run alongside each other
General versus life
The division used by insurers and supervisors.
- Separate licences under the Wft
- General: property, liability, motor
- Life: death, pensions, funeral
- Health insurance forms its own statutory system
What is covered
| Situation | Indemnity insurance | Fixed-sum insurance |
|---|---|---|
| There has to be an insurable interest | Yes | No |
| The payment is never higher than the loss suffered | Yes | No |
| The insurer steps into your rights against the party at fault | Yes | No |
| Examples: buildings, home contents, motor, liability | Yes | No |
| Examples: term life, personal accident, funeral | No | Yes |
| Fixing the value in advance with a valuation | Yes | No |
Which form your policy takes is set out in the conditions. Some products combine both forms in one policy.
What does your premium depend on?
- Nature of the risk: property, liability or a person
- Sum insured: or the amount agreed
- Term: insured for a shorter or longer period
- Age and health: only with fixed-sum insurance
- Excess: mainly with general insurance
- Insurance premium tax: 21%, life insurance is exempt
Insurers weigh these details differently. That is where your saving is.
How we arrange it
- You request a quoteWe take stock of your situation, risk and wishes.
- We compareseveral insurers, on premium as well as conditions.
- You receive a proposalWith an explanation of the differences and the exclusions.
- We arrange the switchIncluding cancellation, so there is no gap in cover.
Why arrange it through Finass Verzekert?
We look at the terms as well as the premium, and stay your point of contact when there is a claim.
Independent
We are not tied to one insurer and compare on the basis of an objective analysis of several companies.
One fixed adviser
You call or email someone who knows your file. No menu options, no changing call centres.
Switching without hassle
We cancel your old policy and align the start date, so you are never a day without cover.
Help with claims
We report the claim and monitor how it is handled. In urgent cases you can reach us on the emergency line.
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Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
Why this distinction matters
It determines the size of the payment and what happens to your claim afterwards.
Prohibition on enrichment, contribution and recovery
Because indemnity insurance may not enrich you, too low a sum insured leads to underinsurance and a proportionately lower payment, and two indemnity policies cannot both pay in full. After paying, the insurer also steps into your rights against the party at fault. With fixed-sum insurance that does not arise: the agreed amount is paid and several policies can pay out alongside each other.
What falls outside the cover in both forms
Exclusions apply to every form. Common to both are damage caused by intent or recklessness (Article 7:952 of the Dutch Civil Code) and by war risks and nuclear reactions. General insurance policies also exclude wear and tear, inherent defect and deferred maintenance. Fixed-sum insurance has person-related restrictions instead: exclusion of high-risk sports, waiting periods, medical exclusions and, with death cover, a restriction for suicide in the first few years.
Frequently asked questions
This is what people ask us most.
Which form does my motor insurance fall under?
The third-party liability and own-damage covers are indemnity insurance: they pay for the actual loss to someone else or to your car. The personal accident cover for occupants that you can add is fixed-sum insurance: it pays a fixed amount for permanent injury or death. So one policy schedule can contain both forms at once.
Can I be paid twice if I have two policies?
Not with indemnity insurance. The prohibition on enrichment in Article 7:960 of the Dutch Civil Code stands in the way; insurers divide the loss between themselves under a contribution arrangement. With fixed-sum insurance it is possible: if you take out two personal accident policies, both pay the agreed amount, provided you declared the other policy on the application.
Is health insurance an indemnity insurance?
Yes. The Health Insurance Act expressly describes health insurance as indemnity insurance between you and a health insurer. With an in-kind policy the insurer pays not in money but in care, purchased from contracted providers. With a reimbursement policy you are paid the costs. In both cases a statutory compulsory excess applies.
Why does an insurer ask about my health?
That only happens with fixed-sum insurance linked to a person, such as term life, personal accident or disability insurance. The insurer then assesses the risk and can impose an exclusion or a premium loading. Incorrect answers fall under the duty of disclosure in Article 7:928 of the Dutch Civil Code and can cost you the payment later.
Every situation is different. For these situations we have a separate page.
- Compare car insuranceThe main page
- Car insurance for the Ford FocusOccupants, injury claims, your own loss
- Car insurance for the Audi Q7Weight, claims burden, tariff group
- Is everyone insured in the Netherlands?Duty to insure, WAM, uninsured
- Car insurance for the Mercedes-Benz E-ClassSums insured, recovery, serious injury claims
- Which insurance is compulsory?Registration, Article 2 WAM, health insurance
- What types of insurance are there?Indemnity, fixed sums, health, income
- How many insurance policies are there in the Netherlands?Main groups, classification, compulsory or not
Read more
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Prefer to call? 072 - 509 24 56, weekdays 09:00–17:00.
Claim on the road? Emergency line 06 - 55 20 40 72.
About our service
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
You will find our licence, KvK and Kifid details and our complaints procedure at the foot of every page.
This page was compiled by Finass Verzekert (LinkedIn). Last updated on .
The information on this page is general in nature and is not personal advice.