Which insurances do you really need and which ones don’t?

Insurance

Insurance is an important part of your personal finances.  Some insurances are mandatory, and others optional.

I will discuss the most important insurances in this short article.

Mandatory

In Belgium, the following insurances are mandatory(1)

  • Civil liability insurance for cars (and other motor vehicles): you are not allowed on the road without insurance.
  • The exercise of various professional activities also requires professional liability insurance. This applies, for example, to architects, accountants and tax consultants and health care professions.

Some insurances are not required by law, but may be required by contract :

  • Fire insurance for tenants : this obligation can be included in the lease agreement
  • Debt balance insurance: When taking out a mortgage loan, the bank may ask you to take out a debt balance insurance. The bank got more certainty the loan will be repaid in the case of death.

Recommended

Other insurances are recommended but not mandatory, these are the main ones:

  • Fire insurance for owners : this insurance covers different damage to your home, such as fire, storm damage, lightning, explosion.
  • Civil family liability: if you or a member of your family causes damage to third parties, this insurance will (partially) intervene. 
  • Legal Assistance Insurance: to defend your rights in court, this covers (part of) the legal costs and fees if you cannot settle.
  • Hospitalization insurance: partial reimbursement of costs not covered by the mutual health insurance in case of hospitalization.
  • Travel insurance: depending on the insurance policy, you can insure illness/accident/death, luggage, vehicles and cancellation insurance.

It is important you are sufficiently insured and not over insured.   Make an estimate of the maximum loss relative to the insurance premium(s).  Can I bear the loss and do I want to take the risk?

You can also easily save on insurance premiums: compare the premiums of insurance companies (this can also be done online) and play the companies off against each other.  Always carefully read the conditions of the insurance before signing the contract!

This info is for informational, educational and entertainment purposes only, and does not constitute financial, accounting, or legal advice. Please do your own research (disclaimer).

Sources :

(1) Compulsory and optional insurance | FPS Economy. (n.d.). FPS Economy. Consulted on August 21, 2021, van https://economie.fgov.be/en/themes/consumer-protection/insurance/insurance-contract/compulsory-and-optional 

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