On the occasion of the purchase of a multimedia device, it is not uncommon for the consumer to be offered an insurance policy covering the malfunction, loss, theft or damage that this device could suffer. . In this context, various abuses have been reported to the Financial Services and Markets Authority (FSMA), which recently adopted a regulation to more strictly regulate the marketing of insurance contracts relating to multimedia devices. These regulations were approved by royal decree of October 20, 2022 and has been in effect since November 13, 2022.
1. Which contracts are concerned?
The regulation concerns insurance sold in Belgium (in stores or online) to consumers and which relates to multimedia devices “at large”that is to say: devices allowing access to the Internet and/or projecting images and/or broadcasting sound as well as their accessories.
Smartphones are thus targeted, but also computers, game consoles, tablets, e-readers, televisions, cameras, printers and connected watches.
2. The end of “falsely free” insurance
It is now prohibited to offer insurance contracts beginning with a free period. The premiums paid periodically by the consumer must be spread over the entire duration of the contract. The consumer will thus avoid taking out insurance, which is often expensive, under pressure from the seller who will have drawn his attention to the free coverage for one (or several) months and to the possibility of terminating the contract during this free period. Concretely, unscrupulous sellers had onerous insurance contracts signed, without really saying so, and customers only realized this a few months later after the free period and at a time when they could no longer terminate the contract. Consequently, by eliminating the possibility of making the first month(s) free and by requiring the consumer to pay a premium as soon as the contract is taken out, the latter will make a choice in full knowledge of the facts and will be aware of the pecuniary commitment he makes by subscribing to the insurance.
3. The end of “variable” bonuses
In addition to having to be spread over the entire duration of the contract, the premiums must be of equal value. Insurance contracts known as “variable premiums” are now prohibited. The gradual increase in premiums implies that the customer has no view on the total amount he will pay for the insurance in question. However, the code of economic law requires the seller to inform the consumer, before he is bound by a contract, of the total price of the service sold. In summary, either the insurance premium is not split, or it is but must then be divided into equal parts, the payment of which is spread over time over the entire duration of the contract. A salesperson can no longer tell you: “Sign this insurance contract now, you will only pay in two months and you can end it at any time.”
4. Promotions are still possible
However, the new rules described above are not intended to tackle all forms of commercial advantage. Indeed, promotions can still be offered to the consumer.
Such promotions must, however, consist of a reduction in the annual premium but cannot in any way materialize by free monthly payments or payments of unequal value. The seller will thus have to deduct from the annual premium the amount of the reduction (which may consist of a free month) and then divide it into twelve equal monthly installments. The first of these monthly payments must be paid upon subscription of the insurance contract.
5. What to do in case of problem?
You can call to the Insurance Ombudsman. Its mission is to write a detailed opinion on the dispute and to try to reconcile the parties in order to resolve the dispute amicably.
This service is free and is the only recognized competent service for insurance disputes in Belgium.