Indexation of the sum insured
- Materials and wages became more expensive
- A higher sum means a higher premium
- It happens automatically, without any action from you
- Without indexation, underinsurance threatens
Indexation · building costs · claims burden
Why did buildings insurance (opstalverzekering) rise so sharply in 2023?
The increase rarely comes from a rate rise alone. In most cases the sum insured has grown with building costs, and the premium with it.
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Deze pagina in het Nederlands: Waarom is de opstalverzekering in 2023 zo omhooggegaan?.
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In brief
The premium for buildings insurance is not a fixed amount but a percentage of the sum insured. That sum is the rebuild value: what it costs to build your home again. Almost every buildings policy has an index clause that adjusts the sum insured automatically each year in line with the index for building costs. If material prices and wages rise, your sum insured rises with them, and so does the premium, even where the insurer does not change its rate.
That is exactly what happened in the years leading up to 2023. Building materials, energy and wages became considerably more expensive, and that rise fed through into policy schedules via the index. A second movement came on top of it: the claims burden increased. The storms of February 2022 produced a very large number of claims, and hail and flooding claims are increasing as well. Higher repair costs per claim reinforce that effect, because roofers and glaziers became more expensive.
Finally, on every non-life insurance premium you pay 21% insurance premium tax. If the premium rises, that amount rises proportionately with it. What you see on your policy schedule is therefore the sum of indexation, rate adjustment and tax. Also read the wider explanation of the premium increase.
What is pushing the premium up?
Three causes explain almost the whole increase on an average policy schedule.
An increased claims burden
More and more expensive claims from storm, hail and flooding.
- The storms of February 2022
- More frequent heavy rainfall and hail
- Repair costs per claim have risen
- Longer waits for tradespeople
Tax and charges
On top of the premium comes 21% insurance premium tax, plus any policy charges.
- The tax rises proportionately with it
- Policy charges per policy or package
- Payment by instalments can carry a loading
- Always compare including tax
What is covered
| Situation | Extended | Comprehensive |
|---|---|---|
| Storm and hail damage to the roof and facade | Yes | Yes |
| Water damage from a pipe or installation | Yes | Yes |
| Your own mishap while doing DIY | No | Yes |
| Flooding from outside after extreme rainfall | Provided that | Provided that |
| Damage to solar panels and a heat pump | Provided that | Provided that |
| Subsidence, pile rot and deferred maintenance | No | No |
What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) that you receive before you take out cover.
Four points to check yourself
Before you switch, it is sensible to know where the increase on your policy comes from.
Look at the sum insured first, not at the premium
Compare this year's policy schedule with last year's. If it shows a higher sum insured, the increase comes from indexation and not from a rate rise. That is not a disguised price increase: without that adjustment your home would be insured for too low an amount and you would have to bear part of a large claim yourself.
Do not switch off the index to save premium
Some policies allow the indexation to be frozen. That lowers the premium immediately and silently creates underinsurance: when you claim, the insurer pays proportionately less. The guarantee against underinsurance usually lapses as well once the information given no longer matches. With unusual properties, a valuation under Article 7:960 of the Dutch Civil Code fixes the value temporarily; that is a safer route.
You can save, but on other levers
Choose deliberately an excess that you can bear, pay annually rather than monthly, bring your policies together in one package and clear out duplicate cover, such as glass appearing on both the buildings and the contents policy. Also check whether you are still paying for extensions you no longer need. That produces real savings, without a gap in the cover.
A higher premium does not widen the cover
Despite the increase, the same risks remain excluded: subsidence, foundation damage and pile rot, damage caused by deferred maintenance, wear and tear and construction or material faults, and damage caused by vermin, mould and slowly penetrating damp. Flooding caused by the failure of a primary flood defence falls outside ordinary buildings cover. Intent and recklessness are excluded under Article 7:952 of the Dutch Civil Code.
What does your premium depend on?
- Indexed rebuild value — the main basis for calculation
- Building cost index — materials and wages
- Claims burden from the weather — storm, hail and rainfall
- Postcode area — burglary, storm and water risk
- Type of cover and excess — extended or comprehensive
- Insurance premium tax and policy charges — 21% on the premium
Insurers weigh these details differently. That is why comparing pays off.
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.
9.5New policy
9.8Claims handling
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.
Frequently asked questions
The questions we are asked most often about this.
Has my insurer raised the rate or is it the index?
You can see that by setting two policy schedules side by side. If the sum insured has risen and the rate per thousand has stayed the same, the increase comes from indexation of the rebuild value. If the rate has been adjusted as well, the increased claims burden plays a part too. Insurers are required to announce a rate change in advance; check your renewal notice.
Can I switch off the indexation?
With some policies you can, but it is unwise. The index keeps your sum insured in line with building costs. If you switch it off, the sum falls behind the actual rebuild value and underinsurance arises: claims are then reduced proportionately. The saving on the premium is small compared with the risk in a large claim.
Why is the premium rising when I have never made a claim?
Buildings insurance does not have an individual no-claims discount like car insurance. The premium follows from your sum insured and from the rate the insurer applies to your risk group. If building costs or the claims burden rise across the portfolio, that feeds through into your premium, regardless of your own claims history.
Is switching to a cheaper insurer sensible?
Only if the conditions are comparable. A lower premium often results from a higher excess, a narrower form of cover or the absence of a guarantee against underinsurance. Compare the form of cover, the excess and the sum insured alongside the premium, and note the notice period for your current policy. After the first contract year, most policies can be cancelled on any day.
Is the insurance premium tax already in the amount on my policy?
Usually yes. Non-life insurance is subject to 21% insurance premium tax, and insurers generally show the amount including that tax and including policy charges. Not every comparison site does so. When comparing quotes, check whether the premium quoted already includes the tax, otherwise you are comparing amounts on different bases.
Read more
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Premium risen sharply?
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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.
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This page was written and checked by an adviser at Finass Verzekert. Last updated on .
The information on this page is general in nature and is not personal advice.