Which insurance is mandatory for property owners in Luxembourg?

Owning property in Luxembourg, whether it is your main residence or a rental property, comes with certain responsibilities. To protect yourself against risks related to your home and safeguard your assets, it is essential to take out the right insurance policies.

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In this article, we take a look at the insurance policies that are mandatory and those that are strongly recommended for property owners, whether they are occupants or non-occupants. 

1. Home insurance: is it mandatory in Luxembourg?

Contrary to what one might think, home insurance is not legally mandatory for property owners in Luxembourg. However, it is strongly recommended and often required by banks when taking out a mortgage.

What does home insurance cover?

Home insurance (or comprehensive home insurance) mainly covers:

• Damage to the building (fire, water damage, etc.)

• Furniture and personal belongings

• Personal civil liability (if third parties are affected by a claim)

💡 Good to know: If you are a co-owner, the co-ownership insurance may cover the building, but you must insure your contents.

2. Non-occupant owner insurance: essential for rental properties

If you rent out your property, it is crucial to take out non-occupant owner insurance (PNO). Although not compulsory, it provides essential protection.

What is non-occupant owner insurance for?

• Claims occurring in the absence of a tenant

• The owner's civil liability

This insurance can also cover:

• Legal protection

• Guaranteed rent (loss of rent)

• Glass breakage and vandalism

• Theft and burglary

• Natural disasters

Non-occupant owner insurance is a supplement to tenant insurance.

3. Civil liability:

Civil liability is not systematically imposed, but it becomes essential when you own a property.

Why is it important?

As a property owner, you may be held liable:

• If tiles or branches fall on a passer-by

• If a fire spreads to a neighbouring building

• If a water leak in your home damages a neighbouring apartment

Civil liability insurance protects you against third-party claims, covering property damage and bodily injury caused by your property.

4. Outstanding balance insurance: compulsory if you buy on credit

If you take out a mortgage in Luxembourg, the bank will require you to take out outstanding balance insurance (or borrower insurance).

What does this insurance cover?

It guarantees repayment of the loan in the event of:

• Death

• Total disability

This insurance protects both the lender and your heirs, preventing a loan from becoming a financial burden in the event of a serious setback.

In Luxembourg, the insurance requirement depends on your situation (occupant or landlord, purchase with or without a loan, etc.). However, the protection of your real estate assets should never be neglected.

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Foyer Lux-Assurances can help you find insurance solutions tailored to your situation as a property owner, whether you live in your property or rent it out. Need personalised advice? Contact one of our advisors!