Insurance in Luxembourg: what is compulsory, what is sensible and what is sold to you

A new arrival in Luxembourg is offered a great deal of insurance in the first three months, usually by a bank, an employer's broker or a landlord's agent, and usually all at once. Some of it is compulsory, some of it is genuinely valuable, and some of it is being sold rather than needed. Sorting the categories takes an hour and saves a recurring cost for as long as you live here.

What the state already covers

Before buying anything, understand what is already in place. Employment in Luxembourg brings affiliation to the social security system through the Centre commun de la sécurité sociale, and health cover through the Caisse nationale de santé. That provides the core of medical care, reimbursed according to published tariffs, alongside the other branches of social insurance.

The gap that supplementary health insurance fills is the difference between the tariff and the actual cost, together with items such as private hospital rooms, certain dental work and optical costs. It is a genuine gap, but it is a top-up rather than a substitute, and the first question to ask is whether your employer already provides a group policy. Many of the larger employers in banking, funds and the institutions do.

The one policy nobody should be without

Personal third-party liability cover, responsabilité civile vie privée, covers damage you or your household cause to other people or their property in daily life. It is inexpensive, it is standard practice in Luxembourg, and it is the policy that responds when a child breaks something at a friend's house or a domestic accident affects a neighbour.

It is frequently included within a home insurance policy, which is one reason to read what you already have before buying it separately.

Home insurance: who insures what

This is where tenants and owners in apartment buildings most often misunderstand their position.

• The building itself is insured by the co-ownership through the syndic, and the premium sits in the charges. This covers the structure and the common parts.
• A tenant insures their own contents and their liability as an occupier, including damage caused to the building or to neighbours by something originating in the apartment.
• An owner-occupier insures contents and liability, and should confirm precisely where the building policy stops and their own must begin, because the boundary varies between buildings.
• A landlord insures their liability as owner and any furniture and equipment provided with a furnished let.

Water damage is the most common claim in Luxembourg apartments, and it travels downward, which means the injured party is usually a neighbour. This is the practical reason occupier's liability matters more here than the modest premium suggests. Many leases require the tenant to hold this cover and to produce the certificate, so check what your lease actually says.

Motor insurance

Third-party motor insurance is compulsory for any vehicle registered in Luxembourg. Beyond that the choice between third-party, third-party fire and theft and comprehensive is an ordinary commercial decision driven by the value of the vehicle.

The point that catches new arrivals is the no-claims history. Bring a written statement of your claims record from your previous insurer, in a language the Luxembourg insurer can work with, before you leave. Recognition of a foreign no-claims record varies between insurers, and the difference in premium over the first years is substantial. Obtaining the document afterwards is far harder than obtaining it before.

Insurance attached to a mortgage

Two products appear at the point of buying property, and they are not the same thing.

• Outstanding balance insurance, the assurance solde restant dû, repays the mortgage if the borrower dies. Lenders in Luxembourg normally require it, and the premium can be substantial for an older borrower or for a large loan. It is also, within limits, deductible.
• Building insurance on the property itself, or the co-ownership's policy where the property is an apartment.

The outstanding balance policy is not always best bought from the lender. The lender may require the cover; it does not necessarily follow that the lender's own product is the cheapest way to obtain it. Ask whether an external policy is acceptable and compare, because on a large loan the difference over the term is material.

What can usually wait

• Legal protection insurance is useful and reasonably popular here, particularly for tenancy and employment disputes, but it is not urgent in the first month.
• Life insurance beyond mortgage protection is a question of dependants and estate planning rather than of arriving in a country.
• Travel and gadget cover is frequently duplicated by a credit card or an employer benefit. Check before buying.
• Pet, appliance and extended warranty products are rarely good value and are the ones most aggressively sold.

Before you sign anything

• Ask your employer what the group cover already includes. Health, life, accident and sometimes legal protection are commonly provided, and duplicating them is pure cost.
• Read what your home policy already contains. Private liability is often bundled in.
• Check the excess as carefully as the premium.
• Check the language of the policy. If the contract is in French or German and you are not comfortable in either, ask for a translation of the key conditions before signing rather than after a claim.
• Note the cancellation terms and dates. Policies here commonly renew automatically, and the window for giving notice is limited.

Making a claim, and the habits that make it painless

The value of a policy is decided at the moment of a claim, and a small amount of preparation changes the outcome more than the choice of insurer does.

• Photograph the apartment when you move in, and photograph anything of value with its serial number. This is the evidence that establishes what existed and in what condition.
• Keep invoices for significant purchases in the same folder as the policy.
• Report promptly. Policies impose short notification deadlines, and a late declaration is one of the few grounds on which an otherwise valid claim is reduced or refused.
• For water damage, involve the syndic immediately. Where the origin is in the common parts or in a neighbouring apartment, the buildings policy and the individual policies interact, and the process runs faster when everyone is notified on day one.
• Do not carry out repairs before the assessment unless they are necessary to prevent further damage, and photograph everything before you touch it.
• Keep a copy of the policy somewhere you can reach it from a phone, because the moment you need the number is rarely the moment you are at home.

The single most useful habit is the move-in photograph set. It serves the insurance claim, the rental deposit and any dispute with a neighbour, and it takes fifteen minutes.

Three questions we are asked

Is home insurance compulsory for a tenant?

It is not imposed by general law in the way motor cover is, but most Luxembourg leases require it as a contractual condition, and the landlord may ask for the certificate each year. In practice, treat it as compulsory. It is inexpensive and the exposure it covers is real.

Do I need supplementary health insurance?

The state system covers a great deal, and many people manage without a top-up. Whether it is worth it depends on your household's expected use, particularly dental and optical costs, and on whether your employer already provides a policy. Check the employer position first; it changes the answer for a large share of people arriving into the financial sector.

Can I keep a policy from my home country?

For some products yes, for others it is impractical because the cover is written for the risks and legal framework of that country. Motor insurance follows the country of registration. Home and liability cover written abroad will not usually respond correctly to a Luxembourg tenancy. Ask the specific question rather than assuming continuity.

Where we can help

Every lease we manage sets out clearly what the tenant must insure and what is already covered. If you have a lease from elsewhere and are not sure which side of the line something falls on, send it to us and we will read the clause with you.

In insurance in luxembourg: what is compulsory, what is sensible and what is sold to you, the section on what can usually wait should end with a test the reader can actually perform.

For home insurance: who insures what, measurement is often more revealing than opinion. For the question raised by “Home insurance: who insures what”, the useful detail is not a generic list of advantages.

For insurance attached to a mortgage, this is especially useful because the first impression can be misleading.

A stronger reading of motor insurance starts by asking what would change for the resident on an ordinary weekday.