5 Important Insurance Policies Every Foreigner Must Carry in Luxembourg

Relocating to Luxembourg is an exciting step, but one often overlooked detail can make or break your stay: having the right insurance policies in place. Whether you’re moving in from Germany, France, or another EU country, understanding the mandatory and essential insurance policies in Luxembourg is non-negotiable.

Master the Luxembourg Insurance Industry for Expats in One Piece

Luxembourg has one of the most robust insurance systems in Europe, thanks to its financial infrastructure and cross-border workforce. As a foreigner living or working here, certain policies are mandatory, while others are highly recommended for your protection.

Although your home country’s insurance might offer temporary coverage under certain EU regulations, Luxembourg’s laws usually require residents to register with local insurers, especially for health, auto, and liability coverage. Delays or gaps in doing this could leave you legally exposed.

Let’s take a quick look at the most important insurance policies you must have as an expatriate in Luxembourg

Important Insurance Policies Every Foreigner Must Have in Luxembourg

1. Health Insurance: A Legal Requirement

Every legal resident in Luxembourg must be affiliated with the Caisse Nationale de Santé (CNS). As a foreigner working for a company, you’ll automatically be enrolled in the public system. However, public health insurance only covers 80-90% of most medical expenses.

That’s where supplementary private health insurance comes in. This policy helps cover the remaining medical bills, specialist consultations, and private hospital rooms. If you’re self-employed, you must register yourself with CNS and pay into the system monthly.

A recent German client of mine, Markus, was shocked after a dental procedure cost him over €1,000, with public insurance covering just €600. Had he opted for supplementary health insurance earlier, he would have avoided paying the difference out of pocket.

Also Read:

2. Civil Liability Insurance: Often Overlooked, Yet Essential

Known as Responsabilité Civile, this insurance protects you if you accidentally cause damage to a third party or their property. It’s usually bundled with home insurance but can also be taken separately.

Imagine your child breaks a neighbor’s expensive garden sculpture or your dog damages someone’s car; civil liability insurance ensures you won’t bear the full financial burden.

In my experience, many newcomers don’t realize this is often required when renting a property in Luxembourg. Landlords may even request proof of coverage before signing the lease.

3. Car Insurance: Third-Party Coverage Is Mandatory

If you own a vehicle in Luxembourg or plan to bring your car from abroad, you’re legally required to carry at least third-party liability insurance. This covers damage you cause to others while driving.

However, I strongly recommend upgrading to comprehensive car insurance. Luxembourg’s road traffic, weather conditions, and increasing number of thefts and vandalism incidents make full coverage a wise choice.

Can your current car insurance from another EU country be enough? Only temporarily. Once you register your car in Luxembourg, local coverage becomes mandatory. I’ve helped dozens of clients transition their car policies without hassle, especially when they switch their license plates.

4. Home and Tenant Insurance: Safeguard Your Belongings

Whether you rent or own your home, you should carry home insurance or tenant’s insurance. It covers fire, water damage, theft, and natural disasters. Luxembourg experiences occasional flooding and severe storms, especially in the north.

A French expat couple I assisted recently suffered a burst pipe in their Kirchberg apartment. Thanks to their tenant’s insurance, the €4,500 water damage repair was covered, saving them from financial stress during their first year abroad.

Tenant’s insurance also covers your personal belongings and can be extended to include liability, which protects you from damages you might accidentally cause to others or to the rented apartment itself.

5. Life Insurance: Protect Your Family’s Future

While not legally required, life insurance in Luxembourg is highly beneficial, especially for expats with dependents. There are two main types:

In 2024, around 68% of life insurance policies in Luxembourg were taken out by cross-border workers or foreign residents. That speaks volumes about its importance.

A former client, Anika, moved from Berlin to Luxembourg with her husband and two children. She was worried about her family’s well-being if anything happened to her. After comparing several offers, she secured a life insurance quote tailored to her age, medical history, and mortgage value, at a premium of €35/month.

Real-Life Case: How a German Client Benefited from Being Fully Covered

Let me share a true story that emphasizes the importance of holding the right insurance policies in Luxembourg.

Thomas, a mid-level executive from Munich, moved to Luxembourg for work in early 2023. Initially, he continued relying on his German health insurance (under EHIC rules) and didn’t bother securing civil liability or tenant insurance.

Four months later, during a housewarming party, a friend slipped and fractured his wrist due to a spilled drink in the hallway. Without civil liability insurance, Thomas had to personally cover medical bills and lost wages, totalling over €6,000.

Worse still, his kitchen caught fire the following month due to a faulty socket. His German home insurance didn’t cover properties abroad. He ended up paying for major repairs and replacing burnt furniture out of pocket.

After that, Thomas came to my office and said, “I never realized how different the insurance industry was until it hit me hard.” Today, he has all the essential policies in place, and we still laugh about how close he came to bankruptcy over things he thought wouldn’t happen.

Can European Coverage Be Enough in Luxembourg?

Many foreigners mistakenly believe that insurance policies from their EU home countries are enough while living in Luxembourg. In truth, they often fall short.

For short stays or holidays, your EHIC (European Health Insurance Card) may suffice. But once you become a resident, especially for work or family relocation, you’re expected to comply with local insurance laws.

Not aligning with these requirements could lead to:

• Fines or legal penalties
• Denial of claim settlements
• Difficulty accessing healthcare or housing

To avoid these setbacks, it’s best to meet with a licensed broker in Luxembourg as soon as you arrive.

Summary of Must-Have Insurance Policies for Foreigners in Luxembourg

Frequently Asked Questions About Insurance Policies in Luxembourg

1. Do I need local insurance even if I already have European coverage?

Yes, in most cases. While some EU-wide policies might offer short-term coverage, Luxembourg generally requires residents to hold insurance policies that are valid under its national law. For example, health and car insurance must meet Luxembourg’s minimum requirements, and foreign policies may not suffice for long-term protection.

2. What is civil liability insurance, and is it necessary in Luxembourg?

Civil liability insurance (assurance responsabilité civile) covers damage you or your family members might cause to others or their property. In Luxembourg, it’s strongly recommended and often mandatory for tenants and homeowners. It protects you in everyday situations, like if your child accidentally breaks a neighbor’s window.

3. Are there insurance requirements for expats who rent property in Luxembourg? 

Absolutely. Renters are usually required to carry household or home contents insurance along with civil liability coverage. These policies protect your belongings and any accidental damage caused to the rented property or others.

4. Is life insurance common for foreigners living in Luxembourg?

Yes, especially for families and professionals. Many expats take out term life or whole life policies to protect their loved ones financially. It can also be a smart move for tax planning, depending on your residency status and income structure.

5. How much does basic health insurance cost in Luxembourg?

Public health insurance (through CNS) is typically calculated as a percentage of your salary, usually around 5.5% for employees. Self-employed individuals pay around 7-8%. Private plans vary widely depending on age, health history, and coverage level.

Also Read:

Final Thoughts: Plan Your Move With the Right Coverage

As an expat living in Luxembourg, the right insurance policies aren’t just a formality; they’re your safety net in a new country. From securing health and liability protection to safeguarding your car, home, and family, these policies are essential tools for stability.

I’ve spent the last decade guiding expats like you through these decisions. If you want personalized help comparing policies, understanding premiums, or just getting the best coverage without overpaying, reach out to a licensed broker. That one conversation could save you thousands of euros and a lot of stress.