Choosing the right car insurance

When you arrive in Luxembourg, there are certain things that surprise you. The high cost of car insurance is one of them.

Luxembourg aims to reduce car use by offering free public transportation. However, due to the quality of the road network and the ability to cross borders quickly, the car remains an important means of escape and is a central mode of transportation in the lives of Luxembourg residents.

It is therefore essential to choose your car insurance carefully. This article will guide you through the different options to help you make an informed decision.

What are the different types of car insurance?

Third-party insurance, the perfect budget option for older vehicles

Third-party insurance, also known as liability insurance, is the legal minimum required in Luxembourg. It covers damage caused to others by your vehicle.

The average cost of this insurance is generally more affordable than that of comprehensive coverage. The advantage of this insurance is therefore a lower premium. Consequently, the disadvantages of this insurance plan are limited coverage and no reimbursement for costs incurred on your vehicle in the event of an accident (when you are not at fault).

Comprehensive insurance, the right choice for new and expensive vehicles

Comprehensive insurance (Casco) offers extensive coverage. In addition to liability coverage, it covers damage to your own vehicle, even in the event of an accident where you are at fault.

The cost of this insurance is higher, but the coverage is more comprehensive. Of course, the downside is the premium amount, which can be very high for vehicles with a high purchase price.

The 4 criteria for choosing the right car insurance

Several key factors must be considered when choosing insurance for your vehicle:

• The age and value of the vehicle: the newer and more expensive your car is, the more relevant comprehensive insurance becomes.
• The driver’s profile: young drivers or those with a history of accidents may face higher premiums.
• Your budget: make sure the premium fits your financial situation.
• Vehicle usage: the frequency and type of trips influence the cost of insurance.

Specifics of the auto insurance market

Luxembourg has certain unique features regarding auto insurance:

• No-claims discount system: rewards safe drivers with premium discounts and penalizes those involved in accidents.
• No default deductible: unlike in other countries, insurance policies in Luxembourg generally do not include an automatic deductible.
• Extended glass breakage coverage: often included, it offers additional protection for damage to windows.

How to compare car insurance quotes?

To find the best insurance:

1. Use online comparison tools to get an overview of the market.
2. Consult an insurance broker or agent for personalized advice.
3. Review the policy details: coverage, exclusions, compensation limits, etc.

Additional coverage options to help you choose the right auto insurance

In addition to basic coverage, here are some additional options to consider:

• Driver protection,
• Roadside assistance,
• Replacement vehicle.

These coverages can be invaluable in the event of the unexpected and offer you more comprehensive protection.

Tips from our auto insurance expert

To reduce your costs while maintaining adequate coverage, we recommend that you:

• Before choosing your vehicle, set your monthly budget for insurance. This will help you avoid making an impulse purchase you might later regret.
• Bundle your insurance policies with the same insurer to take advantage of discounts.
• Opt for annual payments: this can be cheaper than monthly payments.
• Regularly review your auto insurance policy to adapt it to changes in your situation and the value of your vehicle.

When you’re coming from abroad, the cost of car insurance in Luxembourg can come as a surprise—and often a bad one. It’s therefore important to carefully consider whether to choose third-party or comprehensive coverage, as this depends on many personal factors. Third-party coverage may be sufficient for an older vehicle, while comprehensive coverage is better suited for new or high-value vehicles.

Do you own an older vehicle or are you looking to purchase one? Check out our guide to insurance for older vehicles in Luxembourg here.

Rememberthat the cheapest insurance isn’t always the best value in the long run. Take the time to assess your needs and compare offers to find the ideal coverage for your car insurance in Luxembourg.

Article produced in collaboration with our AXA expert