Non-occupant owner insurance in Luxembourg: cover, prices and obligations

What is PNO (non-occupant owner) insurance?
 

Non-occupant owner (PNO) insurance is cover designed for you if you let out a property or own a home without living in it yourself. Unlike standard “occupier” home insurance, which protects the resident’s furniture and daily life, PNO focuses on the structure of the building and covers your liability insurance as the owner.
 

It supports you in three situations:
 

• Let property: it protects your walls throughout the tenancy.
• Property lent free of charge: when you make the property available to a relative, with no financial consideration.
• Unoccupied periods between tenancies: between two lets, your home remains covered, even though it is especially vulnerable at that time due to the lack of direct supervision.
   

Why take out non-occupant owner insurance?
 

Even when empty or let, a home remains exposed to everyday risks. A burst pipe, an electrical fire, a major weather event: any of these can happen at any time, and prove costly.
 

PNO helps fill a gap in cover. Your tenant is required to insure their own risks, but their policy never covers the structure of the building, nor your liability if the loss arises from a hidden construction defect or a lack of maintenance of the building. For you, it is the guarantee that your investment remains continuously protected.
 

What does PNO insurance cover in Luxembourg?
 

A basic PNO policy covers the essentials needed to protect your investment. It always includes your liability insurance as owner, useful if a roof tile comes loose and injures a passer-by, or if a leak in your floors damages the flat below. It also covers material damage to the building: fire, water damage, storms, natural disasters and glass breakage.
 

You can then fine-tune your protection with several options:
 

• Property legal protection: useful in the event of a contractual dispute with your tenant or a neighbourhood dispute.
• Furniture cover: strongly recommended if you let the property furnished, to protect your own equipment (fitted kitchen, living-room furniture, bedding).
• Outdoor fittings: to cover gardens, fences or outbuildings forming part of the property.
   

One point to clarify: some of this cover may already exist in the comprehensive building insurance taken out by your co-ownership association. But your individual PNO remains irreplaceable: it specifically protects your private areas and your personal liability insurance as a landlord, which the co-ownership policy never covers.
 

What does PNO insurance not cover?
 

To avoid unpleasant surprises in the event of a loss, it is best to understand the limits of this policy. PNO never replaces your tenant’s home insurance: it will never cover their furniture, household appliances or personal belongings.
 

Nor does it include unpaid rent cover as standard: this is the subject of a separate policy, or a specific option to be requested separately from your insurer. Lastly, the standard exclusions of a home policy apply: claims linked to a clear and repeated lack of maintenance on your part, or damage occurring during major works not declared in advance to your insurer.
 

Is it compulsory to take out non-occupant owner insurance in Luxembourg?
 

Legally speaking, no: Luxembourg law does not impose any general insurance obligation on property owners. PNO is therefore optional... but in practice, it quickly becomes essential.
 

If you finance your property with a mortgage, your bank will almost always require robust cover guaranteeing the market value of the property throughout the term of the loan. And even in a co-owned property, the overall insurance taken out by the co-ownership association for the common parts does not exempt you from insuring your own private liability: PNO is therefore the recommended security solution.
 

Who pays for PNO insurance?
 

You, as the owner, take out the policy and pay the annual premium.
 

In Luxembourg, legislation on residential tenancy agreements strictly regulates the list of service charges that can be recovered from the tenant. Unlike in some neighbouring countries, the premium for your individual PNO is not one of them: it remains entirely at your expense. However, you can factor it into the calculation of your rental profitability or your overall wealth management strategy.
 

PNO vs the tenant’s home insurance: who covers what?
 

These two policies do not compete with each other: they work together to offer complete and seamless protection for the home.
 

• Your tenant takes out home insurance to cover their own property (furniture, clothes, high-tech devices) and their liability towards you for damage they may cause through their own negligence (such as a kitchen fire or a tap left running).
• You, as a non-occupant owner, insure the walls (the structure), the permanent fixtures incorporated into the building, and your liability insurance as landlord.
   

In the event of a complex claim, such as water ingress through the façade that ends up damaging both your tenant’s sofa and the flat’s parquet flooring, the two insurers work together. They arrange an expert assessment to determine the exact source of the leak and divide the compensation according to the liabilities defined by the Civil Code.
 

How do you choose suitable non-occupant owner insurance?
 

The right PNO policy should be tailored to the physical characteristics of your property and the way you manage your rental. When comparing quotes, you should first analyse:
 

• The maximum reimbursement limits per claim.
• The excess amounts remaining payable by you.
• The specific clauses maintaining cover in the event of an extended rental vacancy, as some policies reduce cover if the property remains empty for more than ninety days.
   

Are you letting a furnished property? Pay particular attention to the value of the declared furniture capital, so that your equipment and furnishings are properly compensated at their fair value in the event of a major claim.