Car Insurance in Luxembourg: Understanding the No-Claims Discount and Its Impact on Your Premium
Car insurance is required by law in Luxembourg if you own a vehicle. The cost depends directly on your no-claims discount, a key factor that influences the amount of your insurance premium.
“When I arrived in Luxembourg, I thought my driving experience would be automatically recognized… but I quickly realized that the system had its own specific features.”
The no-claims bonus system aims to encourage responsible driving by rewarding safe drivers and penalizing risky behavior. Although it is used throughout Europe, how it works varies by country.
How does the no-claims discount work in Luxembourg? Can you keep the no-claims discount you earned abroad? Here is a comprehensive guide to understanding the current rules, with our insurance partner in Luxembourg.
What types of insurance are mandatory in Luxembourg?
No-claims bonus in Luxembourg: a system based on two scales
The no-claims discount system in auto insurance is based on a simple principle: your premium changes based on your driving behavior, particularly in the event of an at-fault accident.
Your car insurance premium paid to the insurer therefore increases after an at-fault accident.
Important: only at-fault accidents affect your no-claims discount. The following events have no impact on your rating:
- Severe weather (storms, hail, etc.)
- Collision with an animal
- Windshield breakage
- Vehicle theft
- Mechanical breakdown
In Luxembourg, insurers generally apply two separate scales, which is an interesting feature for policyholders.
The no-claims discount scale for Liability Insurance (mandatory)
This scale applies to damages caused to third parties in an at-fault accident. It is regulated by Luxembourg law, meaning that all companies apply the same rules.
👉 This coverage is mandatory to drive in Luxembourg.
The Property Damage No-Claims Discount Scale (Optional)
It applies to damage sustained by your own vehicle. Unlike Civil Liability, this scale is not regulated.
👉 Each insurance company is free to set its own rules for adjusting the no-claims discount.
A More Advantageous Car Insurance System in Luxembourg
“What surprised me was that my penalty didn’t affect my entire premium.”
In Luxembourg, the no-claims bonus applies only to the specific coverage in question.
- An at-fault accident with a third party affects Liability Coverage
- Damage to your vehicle affects the Property Damage coverage
👉 Result: a more moderate increase in the insurance premium compared to other countries like France, where the impact is often across the board.
How the no-claims bonus works: how is your premium calculated?
The legal no-claims bonus scale for Liability Coverage in Luxembourg ranges from -3 (best bonus) to 22 (maximum penalty).
👉 The starting level for a new driver is set at 11.
The progression is as follows:
- +3 levels in the event of an at-fault accident
- -1 level per year without a claim
Concrete example:
A driver starts at level 11. After 5 years without an at-fault accident, they reach level 6. If an accident occurs in the 6th year, their rating goes back up to 9.
👉 This system encourages safe driving over the long term.
No-claims bonus and expatriation: keeping your bonus in Luxembourg
Are you moving to Luxembourg and want to keep the no-claims discount you earned abroad?
“That was a real concern for me when I arrived: would I have to start from scratch?”
Good news: in many cases, your driving history can be taken into account.
Equivalencies exist, in particular, with:
- France
- Belgium
- Germany
- Portugal
To claim your no-claims discount:
- Request a no-claims bonus certificate from your previous insurer
- Send it to your new insurance company in Luxembourg
👉 Acceptance will then depend on the insurer’s policy.
Choosing the Right Car Insurance in Luxembourg
“Comparing offers helped me better understand the differences in coverage.”
Beyond the no-claims discount, several criteria must be taken into account:
- Level of coverage (liability, partial or comprehensive coverage)
- Deductible
- Options (roadside assistance, rental car, etc.)
- No-claims bonus conditions
👉 Take the timeto review the offers to choose car insurance that suits your situation.
Learn more:
Moving to Luxembourg? Find all the useful information about insurance here
FAQ: Everything You Need to Know About No-Claims Discounts and Car Insurance in Luxembourg
How does the no-claims bonus work in Luxembourg?
The no-claims bonus system in Luxembourg is a system that adjusts your car insurance premium based on your driving behavior. If you are at fault in an accident, your rating increases (penalty), while each accident-free year reduces it (bonus). This system applies primarily to Liability coverage, which is mandatory for driving.
What is the maximum bonus for car insurance in Luxembourg?
The legal scale for the no-claims bonus in third-party liability insurance in Luxembourg ranges from -3 (maximum bonus) to 22 (maximum penalty). A new driver generally starts with a rating of 11.
Does a non-at-fault accident affect the bonus-malus?
No. Only at-fault accidents affect the no-claims bonus. Claims such as theft, broken windows, natural disasters, or collisions with animals do not affect your rating.
Can you transfer your no-claims bonus from abroad to Luxembourg?
Yes, in many cases. If you are moving from a country such as France, Belgium, Germany, or Portugal, your no-claims bonus may be recognized. You must provide a no-claims bonus certificate issued by your former insurer. Acceptance then depends on the Luxembourg insurance company.
How much does car insurance cost in Luxembourg?
The price of car insurance in Luxembourg varies based on several factors: your no-claims bonus, your driver profile, the vehicle, the level of coverage, and the insurer. On average, liability insurance can start at around €400 to €800 per year, but this amount may be higher for young drivers or if you have a no-claims bonus penalty.
Car Insurance in Luxembourg: Key Points to Remember
- Car insurance is mandatory in Luxembourg for all vehicles
- Your no-claims bonus directly affects the price of your insurance
- There are two coverage categories: Liability and Property Damage
- The Luxembourg system is often more advantageous than in other European countries
- Your no-claims bonus earned abroad can be transferred under certain conditions
Moving to Luxembourg? Simplify the process
Understanding how car insurance works in Luxembourg is an essential step when you move here.
👉 Between the no-claims discount, differences in coverage, and local specifics, it can be helpful to get guidance to make the right choices.
To take your move a step further:
Go further: practical tips to reduce the cost of your car insurance
“After doing some research, I realized that certain choices can really make a difference in the price.”
- Compare multiple insurance quotes in Luxembourg
- Adjust your coverage level to your actual needs
- Choose a higher deductible to lower your premium
- Drive safely to improve your no-claims bonus
👉 A proactive approach helps you optimize your car budget in the long run.