Insurance in Luxembourg

Let's cut to the chase. Insurance can be a hassle, but when it's required (looking at you car and health insurance) it's a must-do piece of admin. When it's optional, as with pets or travel, it's still usually advisable. So here's how to sort out your insurance with the least possible bother.

Car insurance

Any registered vehicle (including scooters, boats, and motorbikes, for instance) requires third-party liability insurance (Responsabilité Civile, or RC), which provides cover against any damage caused by your vehicle to a third party, typically another driver. Apply for insurance before registration, as it is a pre-requisite to get your licence plates fitted.

Once registered, you must keep your insurance green card in the vehicle with you at all times (and take it with you when driving around the EU).

Part-comprehensive (Tiers Personnes) cover typically includes damage due to fire, glass damage, and theft. It may also be known as mini-casco. Policies tend to be more expensive than neighbouring countries, but also generally cover more. For instance, glass damage cover in Luxembourg includes headlights and rear-view mirrors, which is not always the case in other places. You are also generally not charged an automatic deductible (or excess) for damage included within the policy.

Comprehensive (casco) coverage is the gold standard in the Grand Duchy. While this varies by insurer, it will likely include a 'material damage' clause, which covers you for any physical damage to the vehicle whether or not it is your fault. It may also include 'total loss' coverage, whereby if a vehicle is written off the insurer allows you to buy a vehicle of equivalent cost before the accident to keep you moving.

Shop around to get the best deal for you, considering not only the upfront cost of the insurance but also the level of coverage. You can also make use of a no-claims bonus (Bonus Malus) of up to 13 years in Luxembourg, which can knock a chunk off your premium.

Health insurance

The National Health Fund (CNS) provides health coverage for every Luxembourgish citizen, as well as everyone who pays social security in the Grand Duchy. Find out how to register for coverage here. Coverage for family and dependents is not automatic, so check our guide on how to get everyone covered.

Coverage is not comprehensive, however (see an overview here), with contributions required for some services and others not fully covered. Supplementary health insurance is a popular choice, and can be either provided by your employer or taken out privately.

Home insurance

You don't need to take out building insurance in Luxembourg, but if you've bought a property, it's worth considering. In fact, in most cases, if you've taken out a mortgage to pay for the house or apartment, your bank will require adequate insurance to be in place.

Basic building insurance covers physical damage to the property from fire, natural events, and water damage. It can also include theft and vandalism coverage. Water damage and theft/vandalism are often offered as add-ons to the basic coverage, but are worth considering as both burglary and flooding are pertinent risks in the Grand Duchy. If you've bought an apartment, this is usually included in the service charge, but it's worth checking the details to make sure.

Combined coverage is usually the better option for homeowners, as it includes contents insurance. Providers will often let you customise your contents insurance to suit your particular circumstances, for instance to cover leisure items like bikes or sports equipment used outside the home.

If you're a tenant in a rental dwelling, you should also consider taking out contents insurance as a separate policy, which will cover you for accidental damage and theft within the property. Consider combining it with device insurance to protect items like mobile phones and laptops, wherever they are used.

Travel insurance

For health coverage while abroad, make sure you apply for an EHIC card. The card provides equivalent public healthcare coverage in the other 26 EU countries, Iceland, Liechtenstein, Norway and Switzerland. The EHIC is also recognised in the UK if you fall ill or need emergency healthcare. The card is free, and includes your social security details on the other side so that you can access healthcare in Luxembourg. Details on how to apply here.

For further afield, travel insurance can help provide a smoother trip in these pandemic-tainted times. It's not obligatory for most destinations, but really, is it worth risking massive medical bills to save a few cents upfront on your summer holiday? (No, is my answer at least!) Before buying a new policy, however, check if you're already covered. Many premium bank accounts offer free worldwide travel insurance as a perk, and it's included as a perk with many credit cards.

However, check the details, as these standard packages often have restrictive conditions that don't cover every eventuality. If you're going on a skiing holiday, for instance, you may need to pay extra for winter sports coverage. The same applies for adventurous activities in the summer like jet skiing or surfing, which are not always listed on standard policies.

It's often worth buying an additional package just to get cancellation coverage, which is particularly relevant with the threat of viral infections. On this note, make sure you check the policy notes for Covid-19 coverage. The vast majority of policies will cover you for sickness from the virus, but you may not be covered in the event of cancellation or extra costs due to quarantine or self-isolation imposed by health authorities.

Pet insurance

Pet insurance is optional but worth considering. Insurance for a cat or dog typically covers medical expenses, but you can also include add-ons such as search expenses if your pet goes missing, or the cost of an animal lodging if you're hospitalised and unable to care for the pet. Insurance is limited to one provider - Willis Towers Watson. You can get a quote with them directly or via AXA.

There's far more detail on all things pet-related in Luxembourg in our dedicated article.

Life insurance

Life insurance pays out a set sum if you die while the policy is still in place. Its main aim is to help provide for those you leave behind. Essentially, you make monthly payments towards the policy and, if you die during its term, the beneficiaries get a lump sum of cash. If you don't, at the end of the policy you get the lump sum back plus interest which has built over the term.

It's not a necessity, but worth considering if you're purchasing a property with a substantial mortgage or have dependents who rely on your income. In Luxembourg, no tax is paid on the premium or the capital gains over the course of the policy, meaning that it can also be an attractive way to manage your money. 

Finding the best insurance

Price comparison sites like topassur are a good first point of call. Simply select the insurance type you need and put in the requested details to get back a range of quotes. Remember to check the small print, as while cheaper deals may seem more attractive, you also want to ensure you're getting adequate coverage.