Welcome to Luxembourg! If you’ve just moved to this wonderful country, you will probably already have started to familiarise yourself with different areas of daily life here. One of Luxembourg's many special features includes the bonus-malus system in car insurance. This system can significantly impact the cost of your insurance based on your driving behaviour. But don't panic, we’ll tell you exactly how it works.
So what is the bonus-malus system?
If you come from a country that does not use the bonus-malus system, then let us explain to you in a simple and effective way how it works!
The goal of the bonus-malus system is mainly to encourage responsible behaviour on the road while directly impacting your insurance premium. In short, this means rewarding good drivers and penalising bad ones.
Below you will find an illustration of the bonus-malus scale applicable in Luxembourg. The scale goes from level -3 to 22, -3 being the best. If you take out a new insurance policy and you’ve never used bonus malus before, then you’ll start at the base level, at 11. Similarly, if you buy an additional vehicle, you’ll start at 11, as you cannot duplicate the level reached on other vehicles.
If you come from another country, then perhaps you’ll know that car insurance systems across Europe are not all the same. A certificate of your previous bonus-malus and your claims record summarising your claims history over the last 5 years will be required to accredit your experience of driving in Luxembourg.
How the bonus-malus system works
If there is no claim during the observation period*, your bonus-malus is reduced by 1 level. Your premium will go down.
However, in the event of a claim, your level will go up 3 points, so your premium will go up too.
Now imagine that you are at a higher level than 11, so in the red zone in the event of a claim. If you are not liable for a claim for 4 consecutive years, then you’ll be at level 11, the base level.
The red part represents the levels at which your premium is higher than the basic one. This part is to penalise bad drivers. The green part, where your premium is lower than the basic premium, is to reward good drivers.
Let’s say you're at the base level, so at level 11:
Bonus: If you don't have any claims during the one-year observation period*, you’ll go down one level on the bonus-malus scale. You are now on the green part of the scale and your premium will be lower than the basic premium from level 9 onwards.
Malus: On the other hand, if you are liable for an accident and you’ve caused damage to another party, your level will go up 3 points and you’ll be on the red part of the scale. Your premium will be higher than the basic premium.
*Observation period = 12 months ending 1 month before the 1st day of the month of the policy renewal date
The influence of the different formulas on the bonus-malus
Not yet heard of easyPROTECT Auto? Don't worry, here’s your perfect guide, including the information you've just seen above. Now it's up to you to choose your partner in case of a mishap!
First, you need to understand the two components of the insurance premium that could be affected by your bonus-malus level:
The civil liability part
Civil liability insurance, which is compulsory, is automatically included in all the formulas. In all cases of claims involving a third party where you are liable, your bonus-malus level will go up and increase your premium.
Material damage, impacted differently depending on the formula
Security: not covered because it does not include material damage cover
Comfort: limited impact because of the joker
Performance: no impact
Security formula:no bonus protection
Does your car already have a good few miles on the clock and will it soon be time for a change? This formula is the best choice for your compulsory insurance in Luxembourg.
Comfort formula: Casco Joker
If you think you're cautious enough but prefer to be well insured in case you have a minor mishap, then the “Comfort” formula is your best co-pilot. This choice is budget-friendly and offers you ideal cover, as it should. For each material damage reported, your bonus-malus level in material damage goes up 3 levels. If you do not declare any material damage claims for three years, you’ll get a joker to use in your favour. Your bonus-malus level for material damage will therefore not increase the next time you report a material damage claim. On the other hand, it will increase for any subsequent claims.
Performance formula: no malus
Have you just bought your dream car and want to protect it as if it were the most precious jewel in the world? Then this formula is made for you! Like the previous formula, this formula also includes the material damage guarantee which you might know by the name of Casco, Omnium (Belgium) or tous-risques (France). With this formula, your premium will not increase in the case of pure material damage. Your bonus will thus be protected. This remains the preferred formula of 78% of LALUX easyPROTECT Auto customers. Your peace of mind is worth more than complicated bonus-malus calculations, isn't it? LALUX guarantees that you're covered whatever the circumstances.
Useful information about importing your vehicle
If you and your car arrive in Luxembourg from another country, you have 6 months to register that car. Would you like to know more about how to import your beloved car to Luxembourg and how to register it? Then explore our guide here!
Did you know that every vehicle on the road in Luxembourg must be covered by civil liability car insurance?
To take out this type of insurance, you must present your bonus-malus certificate, a document that summarises your 5 previous years as an insured party. Although the insurance systems vary across Europe, there are equivalents namely in France, Belgium, Germany and Portugal.
