Choosing the right car insurance: what do you need to know?

Are you arriving in Luxembourg with your car or do you need to buy one on the spot? Car insurance is compulsory in Luxembourg. Find out for yourself, as there are bound to be many differences with your home country. Rates, deductible system, scope of comprehensive insurance… Let’s take a look at the most important information with our partner AXA, Luxembourg’s insurance specialist.

#1 Insurance before registration

When you arrive in Luxembourg with your car, you must register it within 6 months of your arrival. To do this, you’ll need to provide a certificate of insurance. The steps are to be taken in the following order:

Only after you have completed these steps can you have your new license plates installed.

Find here all the steps to register your car in Luxembourg.

#2 What is casco insurance?

Casco is a very common term in Luxembourg. What does it mean? Insuring your car with Casco simply means that you have the best possible level of insurance cover. The casco insurance is the equivalent of the Omnium insurance for the Belgians. The French will talk about all-risk insurance.

Please note that this optimal level of coverage may differ from one country or insurer to another. Ask your insurance company for more information.

Deductible for car insurance Luxembourg

#3 The franchise is not in use

Perhaps you are used to having to pay a deductible in case of damage to your car? The deductible consists of paying a portion of the repair cost out of your own pocket when it exceeds a certain threshold.

However, with some insurers such as AXA, you have the possibility to ask for a deductible when you sign your contract. This allows you to lower your premium.

#4 Glass breakage coverage is not limited to glass

In some neighboring countries, having a mirror or headlight repaired is only covered by the insurer if the insured has comprehensive insurance.

In Luxembourg, it is not necessary to take out a Casco insurance for this. The glass breakage guarantee is sufficient to cover this kind of damage without application of a malus.

Luxembourg car insurance rates

#5 Car insurance is more expensive overall in Luxembourg

If your car was previously insured in another country, you may notice a noticeable difference in the price of your new insurance. For example, there is a difference of 30 to 50% between the amount of a French car insurance premium and a Luxembourg insurance premium.

This may come as a surprise. But this difference can be explained by higher levels of insurance coverage.

In case of a claim, it is rare to have to pay money in Luxembourg. You may have to pay VAT.

# 6 Breakdown assistance is optional

It is important not to confuse accident assistance with breakdown assistance. Accident assistance is automatically included in most insurance contracts. If your vehicle is immobilized following an accident, your insurer will help you out without any problem.

However, in the event of a breakdown (lack of fuel, wrong fuel, dead battery, etc.), you must have subscribed to an option to be entitled to a tow truck. Think about it, especially as it’s not the most expensive part.

Find here all the details of the car assistance offered by AXA Luxembourg : breakdown service in case of accident, breakdown or puncture, oil change and towing in case of misfuelling, opening of the vehicle in case of lost or forgotten keys.

Car insurance bonus-malus rules Luxembourg

# 7 The rules for calculating the bonus-malus are specific to each country

Although the bonus-malus system is used throughout Europe, each country has its own regulations. It is important to know the Luxembourg rules to understand how your premium will evolve over time.

For example, most insurers in Luxembourg use two scales. One deals exclusively with civil liability. It is based on the damage you cause to third parties in accidents for which you are responsible. The other covers damage to your own vehicle caused by you or an unidentifiable third party.

A two-tier system means that in the event of a malus, the associated percentage increase is applied to only part of your premium. This depends on the type of accident.

For example, if you have damaged your door against a wall, a material damage penalty will be applied. This is the part of your premium that is related to the Property Damage coverage that will increase. The rest of your premium will remain the same. The premium increase is therefore less significant.

Find out more about how the bonus-malus works in Luxembourg here.

If you come from France, Belgium, Germany or Portugal, you have the possibility to claim in Luxembourg the bonus you had in your country of origin.

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More information on the various insurance policies available in Luxembourg