Duty of advice in car insurance: who owes it to you?

Yes, you are owed a duty of advice, and not only by a broker. In Belgium, the obligation to establish your demands and needs rests in principle on every insurance distributor: broker, agent, bank or direct insurer. The reasoned recommendation varies from one channel to the next, and above all the proof you keep of it.

A legal obligation the broker does not hold exclusively

Brokers like to present themselves as the only professionals who advise you. That is a sales argument, not a rule of law.

The FSMA practical guide, updated on 24 September 2024, bases the duty of care on Article 284, paragraphs 1 and 2, of the Insurance Act of 4 April 2014. The distributor must specify the client's demands and needs, then make sure the proposed contract meets them. The guide states that this applies to insurance undertakings and to intermediaries, across all branches, and even when no advice is given. FSMA is the Belgian Financial Services and Markets Authority.

At a minimum the interview must cover two points: the risks you want covered, and the contracts you already hold for them. Older texts and some court decisions still quote Article 273, paragraph 3: that is the former numbering of the same rule.

A company selling online is therefore not exempt from asking questions. It asks them in a form instead of at a desk.

Why does everyone think only the broker must advise?

Because comparing the market is the broker's trade, and the mix-up with advice sets in quickly. A broker queries several companies, a direct insurer represents only one, and people conclude that the latter "advises" nothing.

The objection deserves a serious hearing, because it holds a grain of truth. A direct insurer cannot recommend a competitor's contract. Its recommendation, when it makes one, is confined to its own catalogue. Our own comparison of distribution channels does set the broker's personalised advice apart from the self-service model of direct sales.

But the breadth of choice and the existence of the obligation are two separate things. The broker has a duty to analyse, plus the ability to compare. The direct distributor has the same duty to analyse, within a narrower range of products. Confusing the two is like assuming a restaurant with a short menu need not ask whether you have allergies.

Where does the line fall between advice and execution-only sales?

The border runs through the recommendation, not the analysis. According to the FSMA guide, when the distributor gives advice it must explain why a particular product would best meet your demands and needs (Article 284, paragraph 1, third subparagraph). In an execution-only sale, that explanation disappears. The needs analysis does not.

Two further rules frame the relationship. Article 283 requires disclosure of the nature of the remuneration (commission, fees or other) and of the basis of the advice: impartial analysis or exclusive mandates. Article 284 also requires clear product information, with the standardised insurance product information document (IPID) for all non-life insurance, car insurance included.

This table describes the general rule as FSMA presents it. It replaces neither your specific policy conditions nor the documents you are handed: each distributor documents its own process.

The banker as tied agent: same obligation, closed catalogue

Your bank adviser offering the group's car insurance is legally an agent, not a broker. The duty to analyse still applies. He or she may well ask about your use, your garage and your existing contracts, then conclude that the in-house formula fits.

The trap lies elsewhere. With a closed catalogue, the recommendation never answers the question "is there something better elsewhere?". The law does not ask it to, provided the basis of the advice is announced: exclusive mandates, not impartial analysis. If that mention appears nowhere, ask for it. A "package" discount never excuses this transparency, and it can only be weighed against another offer in euros, not in percentages.

How can you tell whether you received advice or just a quote?

A quote is not advice, and that is the costliest confusion on the market. The intermediation form proposed by Assuralia, whose explanatory note dates from 22 June 2020, exists precisely to make the difference tangible: it says whether the advice is personalised, whether it rests on an impartial analysis or on a few partners, how the product is justified and how the intermediary is paid. Four sector-specific forms exist, including one for non-life insurance.

To see where you stand, run through these points:

• You were asked about your actual use, your mileage, the vehicle's value, the regular drivers and where the car is parked.
• You were asked which contracts you already held for these risks, which the law counts within the minimum to check.
• The type of advice, personalised or not, appears in black and white in a document.
• A written sentence explains why this formula rather than another, with its excess.
• The nature of the remuneration was announced before signing.
• The standardised information document and the general conditions were handed over.

No box ticked: you received a price. Four boxes or more: you can speak of advice.

Eighteen thousand euros declared, twenty-four thousand actual value

A needs analysis is far from abstract on the day of a claim. Picture a vehicle really worth 24,000 euros, declared at 18,000 because nobody checked the invoice. If the contract applies a proportional rule to the insured value, a 9,000 euro loss is not paid in full.

This calculation is an illustration: everything depends on the clause actually written in your contract, which you can check in your specific policy conditions. It shows why a written record of the analysis matters. Who suggested 18,000 euros, who asked for the invoice, who flagged the risk of under-insurance? Without paper, each side tells its own story. The Liège Court of Appeal has already found a broker liable on this ground, a ruling we detail in our article on the broker's real status in the FSMA register.

What can you do when the advice fell short?

In order. First a written complaint to the distributor or the company, with your documents and a reasonable deadline for a reply, one month as a rule. Then the Insurance Ombudsman, which is free and handles disputes against a Belgian company or intermediary, but only after that first step. Our article on the Ombudsman and the five bodies not to confuse explains whom to contact depending on the nature of the problem.

FSMA, for its part, supervises the registration and conduct of intermediaries. It does not retry your case and it refunds no one.

Keep in mind, finally, that a liability action against the intermediary remains possible once a failure, a loss and the link between them are shown. That is a heavier route, and it requires a lawyer.

Verdict: demand proof, not promises

To place the companies one by one, our ranking of Belgium's best car insurers is a good starting point. To frame your needs in two minutes, take the quiz, then move on to the comparison of offers.

This site informs and compares. It is not an insurance intermediary and gives no individual recommendation.