Motorbike and car liability insurance is legally mandatory in Luxembourg. All motor vehicles, including caravans and trailers, are subject to this requirement.

Professional liability insurance is another type of compulsory insurance that applies to certain professions. It covers material, immaterial and bodily damage resulting from negligence, error, or omission by self-employed professionals or employees of the company.

Doctors, architects, travel agents, estate agents and lawyers, for instance, are required to have specific coverage linked to their contractual liability.

Fire insurance falls into the category of contractually required coverage. It is not imposed by law, but you may be obliged to take out a policy under a contract or tenancy agreement. Similarly, comprehensive or partial casco insurance is not legally required, but it may be imposed by a credit institution if you’re financing your vehicle through a loan.

The third category includes optional insurance policies. Unless you’re a dog owner, private liability insurance is not mandatory. This type of insurance covers a wide range of situations, from a window broken by your child’s ball to someone slipping on an icy sidewalk in front of your home.

Another optional yet common insurance is supplementary health coverage. As an employee in Luxembourg, you are automatically covered by the National Health Fund (CNS). However, it does not cover all costs; the reimbursement rate for adults is around 88%. A supplementary health insurance policy allows for higher reimbursements.

Understanding home insurance

Home insurance provides protection for both movable and immovable property, and often includes personal liability coverage. Typically, it covers damage caused by fire, weather events, water damage, broken glass or mirrors, theft, attempted theft, vandalism and liability related to the insured property. In Luxembourg, taking out home insurance is not legally required. However, property owners will usually need an insurance policy when applying for a mortgage, as banks often insist on it.

For tenants, requirements may differ. A lease agreement can include a clause obliging the tenant to take out home insurance. It’s essential to carefully check the terms of your contract.

This article was written for the August/September 2025 issue of Paperjam magazine (Expat Guide), published on 10 July. The content is produced exclusively for the magazine. It is published on the site to contribute to the full Paperjam archive. Click this link to subscribe to the magazine.

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