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. And as you will see, with a fleet of nearly 450,000 vehicles for 660,000 inhabitants, cars are a central part of life for residents of Luxembourg.
Admittedly, Luxembourg has made a commitment to reducing car use by offering free public transportation. But due to the quality of the roads and the ability to cross borders quickly, cars remain an important means of escape.
It is therefore essential to choose the right car insurance. And choosing between third-party insurance and comprehensive insurance can be complex. 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 economical option for older vehicles
Third-party insurance, also known as civil 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 comprehensive insurance. The advantage of this insurance is therefore a lower premium. As a result, the disadvantages of this insurance package are limited protection and no reimbursement of costs incurred on your vehicle in the event of an accident (when you are not at fault).
Comprehensive insurance, the right option for new and expensive vehicles
Comprehensive insurance (Casco) offers extensive coverage. In addition to civil liability, it covers damage to your own vehicle, even in the event of an accident for which you are responsible.
This insurance is more expensive, but it offers more comprehensive protection. Of course, the downside is the premium, 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 taken into account 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.
- Driver profile: young drivers or those with a history of accidents may have higher premiums.
- Your available budget: make sure the premium is compatible with your finances.
- Vehicle use: how often and where you drive affects the cost of insurance.
The specifics of the auto insurance market
Luxembourg has certain specific features when it comes to car insurance:
- Bonus-malus system: rewards good drivers with premium discounts and penalizes those who have accidents.
- No default deductible: unlike in other countries, insurance policies in Luxembourg do not generally include an automatic deductible.
- Extended glass breakage coverage: often included, this offers additional protection for damage to windows.
How can you compare car insurance offers?
- Use online comparison tools to get an overview of the market.
- Consult a broker or insurance agent for personalized advice.
- Analyze the details of the contracts: 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,
- Breakdown assistance,
- Replacement vehicle.
These coverages can be invaluable in the event of unforeseen circumstances and offer you more comprehensive protection.
Advice from our auto insurance expert
To reduce your costs while maintaining adequate coverage, we recommend that you:
- Before choosing your vehicle, set your monthly insurance budget. This will help you avoid making impulse purchases that you may regret.
- Combine your insurance policies with the same insurer to benefit from discounts.
- Opt for annual payments: this can be cheaper than monthly payments.
- Regularly review your car insurance policy to adapt it to changes in your situation and the value of your vehicle.
When you come from abroad, the price of car insurance in Luxembourg can be a surprise, and not a pleasant one. It is therefore important to carefully consider whether to choose third-party or comprehensive insurance, as this depends on many personal factors. Third-party insurance may be sufficient for an older vehicle, while comprehensive insurance is more suitable for new or high-value vehicles.
Do you have an older vehicle or are you thinking of buying one? Check out our guide to insurance for older vehicles in Luxembourg here.
Rememberthat the cheapest insurance is not always the most advantageous in the long term. Take the time to assess your needs and compare offers to find the ideal coverage for your car insurance in Luxembourg.
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