Understanding the no-claims bonus in car insurance
It is mandatory to take out car insurance if you own a vehicle in Luxembourg. The cost depends on the policyholder's no-claims bonus.
The bonus-malus scale is designed to encourage responsible driving and penalize bad drivers. Although this system is used throughout Europe, each country is free to implement it as it sees fit.
How does it work in Luxembourg? Is it possible to claim a bonus earned in another European country? Here is an overview of how the bonus-malus system works in Luxembourg, provided by our partner Axa Assurances Luxembourg.
What insurance is mandatory in Luxembourg?
A car insurance system based on two distinct scales
The bonus-malus system is a European practice designed to encourage responsible driving. The car insurance premium paid to the insurer increases in the event of a car accident for which the driver is responsible.
The bonus-malus scales apply in the event of accidents for which the driver is responsible. Damage to the vehicle caused by adverse weather conditions, a collision with an animal, broken windows, theft, or breakdowns does not affect the bonus-malus rating. This is the case even if the insurer covers the costs.
In Luxembourg, most insurers apply two separate scales. The insured may therefore have two bonus-malus levels, relating to different types of claims.
The civil liability bonus-malus scale
This scale changes in the event of damage caused to a third party following an at-fault accident. This scale is legal. All insurance companies apply the same rules for changing the bonus-malus rating and increasing the car insurance premiums paid to the insurer.
The material damage bonus-malus scale
This scale changes depending on the damage caused to your own vehicle. There is no legal framework for this scale. Each insurance company sets its own rules.
A more advantageous insurance system in Luxembourg
In Luxembourg, the bonus-malus system only applies to the relevant cover. It affects civil liability cover in the event of an accident involving a third party. It affects property damage cover in the event of damage to your own vehicle.
Put simply, a penalty will only increase part of your insurance premium, not the whole thing. This means that increases are often smaller in Luxembourg than in neighboring countries such as France.
How does the car insurance premium change?
The legal civil liability bonus-malus scale ranges from -3 (best bonus) to 22 (worst malus). 11 is the basic level assigned to a new driver.
Over the years and as claims are made, the premium linked to civil liability cover changes as follows:
For each accident for which you are responsible, your level increases by 3 points the following year. Conversely, each year without a claim reduces your level by 1 point.
Let's take the example of a driver starting at 11. After 5 years without an at-fault accident, their rating has dropped to 6. If they cause an accident in the sixth year, their rating goes back up to 9.
Claiming your car insurance bonus acquired abroad
You arrive in Luxembourg and wonder if it is possible to keep the bonus you have earned over many years abroad?
It all depends on your country of origin. Car insurance systems vary from one country to another. However, there are equivalencies with France, Belgium, Germany, and Portugal.
To benefit from your previous no-claims bonus on your new insurance policy in Luxembourg, simply provide your new insurer with a no-claims bonus certificate issued by your previous insurance company.
How to choose the right car insurance? Find advice from our expert.
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