The building’s insurance: what it covers, and what it does not

Many co-owners believe the building’s policy covers them completely. It covers the building and the syndicat de copropriété (the co-owners’ association) — not your belongings, and not your personal liability.

Who is insured, and against what

The co-owners’ association is a legal person with legal personality, whose purpose is “the upkeep of the building and the administration of the common parts”. And the Law adds: “It is liable for damage caused to co-owners or to third parties by a construction defect or by a failure to maintain the common parts, without prejudice to any right of recourse” (article 11 of the Law).

It is precisely that exposure — together with damage to the common parts themselves — that the building’s policy is designed to cover.

What the duty to insure rests on

Let us be precise, because this is a point on which one often reads assertions carried over from other legal systems: the Law of 16 May 1975 does not itself provide for taking out a building insurance policy. In practice, that cover is provided for by the règlement de copropriété (the condominium regulations) and/or decided upon by the general meeting, and it is universal in Luxembourg condominiums. It is also generally required by the lenders financing the units.

The Law does presuppose its existence when it deals with what becomes of the compensation in the event of destruction, referring to sums representing “the insured building” (article 32). But the basis of the obligation, for your own building, lies in your regulations and in your meeting’s decisions: that is where it must be checked.

What a building policy generally covers

• damage to the common parts: the fabric, the structure, common equipment, the lift and the boiler room;
• the association’s public liability towards co-owners and third parties;
• depending on the cover taken out: fire, water damage, storm, glass breakage in the common parts, electrical damage, natural disasters, and sometimes legal expenses cover.

The actual extent of cover, the limits, the exclusions and the excesses are set out in your policy. We will provide the details on request, and the conseil syndical (the co-owners’ supervisory board) may examine them as part of its oversight of the management (article 16 of the Grand Ducal Regulation).

The five points to review every year

1. the insurer and the policy number;
2. the renewal date and payment of the premium;
3. the extent of cover, measured against the actual condition of the building and the works carried out;
4. the level of the excesses, which determines what the condominium bears itself;
5. the claims record over recent years.

That last point is the most telling: a recurring claims record pushes the premium up and almost always signals a technical problem better dealt with than endured.

Our own position, stated plainly

For the condominiums we manage, the building insurance is placed with D&D Assurances, a Foyer group agency belonging to the same ecosystem as D&D Syndic, unless otherwise agreed. This is a term of our mandate, and we would rather state it here than leave you to discover it. The general meeting remains free to decide otherwise.

Reviewing your policy

If you would like to know the cover and excesses that apply to your building, or to have the adequacy of the cover reviewed after works, write to us stating your building: we will send you the policy details and we can put the subject on the agenda.

General information on Luxembourg condominium law (the amended Law of 16 May 1975 and the Grand Ducal Regulation of 13 June 1975, in their consolidated version applicable as at 1 August 2023). Your own règlement de copropriété may lay down specific rules, which prevail within the limits set by the law. This content is not legal advice.