I've recently had to repair a leaking coolant radiator on my 94 S4 of which more when I have a few minutes to update the forum.
However, this is to warn everyone with the same type of coolant sensor as I have - its the Peugeot one (part no 1306 -24). You need to check this sensor now. You can probably best do this by removing it and checking the resistance in both high and low positions - see below.
This is essentially a float type switch - open circuit when level good and closed circuit when level low.
However, since the float spends most of its time in the high position it gets seized there by the debris in the coolant system and consequently may fail to warn of low coolant as in my case.
You can either buy a new one at about £40 from a Peugeot dealer or dismantle yours for repair.
From the connector end a reed switch is buried in mastic down the dip tube. The float has a magnet that operates the reed switch. In most cases the reed switch will be ok so you probably just need to free up the float.
To do this, on a cold engine, remove the pressure by opening the tank cap and carefully remove the sensor (42mm socket). May be a little coolant spillage which you could obviate by siphoning out a bit of liquid before u start.
The lower end of the dip tube has a blanking disk which you can remove using a lino knife to cut around the glued joint. You should then be able to remove the float. Note the orientation when you remove it - must go back the same way!
Now thoroughly clean the float and the dip tube. I also enlarged slightly the holes in the dip tube outer to allow a faster float response and possibly help with preventing future seizures!
Once the float can freely slide inside the dip tube you need to test the operation by putting a resistance meter across the two terminals and checking that u have short circuit at the low position and open circuit at the high.
if all's, well superglue the disk back onto the bottom of the dip tube and when dry reassemble.
This sensor obviously never does a self test so maybe this cleaning procedure needs doing regularly?
see picture below for some clarification of my words!