Renting: is home insurance compulsory in Luxembourg?

Is it compulsory to have home insurance when you are a tenant in Luxembourg?

Contrary to what you might think, the answer is no: there is no general legal obligation for tenants to have home insurance in Luxembourg.

But be careful, as two things need to be distinguished:

• What the law says: the Luxembourg State does not impose any requirement on this point.
• What your tenancy agreement says: in the vast majority of cases, it is the landlord who makes insurance compulsory through a specific clause.
  And in practice, this is almost always the case: most landlords ask for a certificate of insurance when the keys are handed over, and then on each anniversary of the contract.

Contractual obligation: what can a landlord require in Luxembourg?

Even if the law does not require it, the tenancy agreement is binding between you and your landlord. And a landlord is fully entitled to require you to be insured, at least for tenant's liability insurance.

In practical terms, the tenancy agreement then includes an “insurance” clause, with an obligation to provide a valid certificate before moving in, and then to renew it every year. For your landlord, this certificate is a real guarantee: it proves that in the event of fire, explosion or water damage, it is an insurance company that will cover the damage, not them.

What minimum insurance does a tenant need in Luxembourg?

The important thing is to be properly covered against major rental risks and damage caused to third parties.

• Tenant's liability insurance: this covers accidental damage caused to the building or neighbouring properties.
• Protection for your belongings: furniture, electronic devices, clothes and personal effects... covered in the event of theft, fire, water damage or even outside your home
• Additional options if needed: Glass breakage insurance, emergency assistance at home and home legal protection.
  Specific case - Fitted kitchen: As a tenant, you should also remember to insure the contents of your kitchen, as these are not always automatically included in the home owner's insurance.

What are the risks for a tenant without home insurance in Luxembourg?

There is no fine to worry about, since there is no legal obligation. The real risk is financial.

• The financial risk: in the event of a fire or major water damage for which you are responsible, repairs and compensation for neighbours are entirely at your expense. This could potentially amount to tens or even hundreds of thousands of euros.
• The contractual risk: if your tenancy agreement requires insurance and you do not provide a certificate, you risk formal notice from your landlord, and potentially your tenancy being called into question.

Is home insurance compulsory for home owners in Luxembourg?

The same logic applies as for tenants: there is no general legal obligation, whether you live in the property yourself or rent it out. But it is strongly recommended.

One major exception: if you finance your purchase with a bank loan, the bank will almost always require fire insurance and home insurance in order to grant the loan.

Also note: the tenant's insurance (which covers their liability and furniture) is not the same as the owner’s insurance, whether occupying the property or not, which mainly covers the walls, roof and structure of the building.

How to choose your home insurance: five questions to ask yourself

Before taking out home insurance, ask yourself these questions:  

1. What is my status: tenant, owner-occupier or landlord? 
2. What is the actual value of my household contents, including the fitted kitchen? 
3. Is my property located in a flood-risk area? 
4. Do I have any specific equipment to cover: solar panels, heat pump, jewellery and valuables?
5. Does this insurer offer compensation at replacement value or actual value? This last question can represent a difference of several thousand euros in the event of a major claim.