Car Insurance Plans
Comprehensive motor insurance policies include Third Party insurance, and extend cover to protect against damage to, and theft of, your own vehicle. Comprehensive Car Insurance in Hong Kong includes Section (I) Insurance, which protects against loss or damage to your vehicle, and Third Party coverage.
While Third Party Insurance Coverage, known as Section (II) Insurance, is the minimum coverage required under Hong Kong Law, depending on the value of your vehicle and the location where you live, it may be worth it to consider the purchase of a more extensive type of protection in the form of a Comprehensive Car Insurance policy.
Section (I) Insurance Coverage
Loss of or damage to the motor car: up to the reasonable market value of the Motor Vehicle at the time of its loss or damage or the Insured’s Estimated Value of the Motor Vehicle as specified in the Schedule whichever is the lesser amount
Section (I) Insurance covers for accidental damage to the insured vehicle (whether another party is involved or not), and theft of the insured vehicle. Mechanical or electrical breakdowns, or failures, are not covered by this insurance.
Section (II) Insurance Coverage
Third Party Death or Bodily Injury: HK$ 100,000,000 (set by the government)
Damage to Third Party Property: HK$ 2,000,000
It may be possible to increase the limit of indemnity for Third Party Property Damage with a few insurers, but this is rarely requested. The Third Party Property Damage limit of indemnity is usually lower for motorcycles at HK$750,000, and the limits may also vary for Commercial Vehicle and other types of motor insurance.
Administration and the Claims Process on Comprehensive Coverage
You can claim for damage to your own vehicle before the police investigation has been completed and before any party has been found at fault for the accident. Should the other party be found at fault, your insurer will then seek to recover the claim amount (including any excess you have paid) from their Third Party insurance or from them individually. Please Click Third Party Vehicle Insurance for more information about the claims process for Third Party Accidents.
Whenever there has been an accident which may lead to a claim the insurer must be informed immediately. When claiming for damage to your own vehicle you may obtain the repair quotation however do not start any repair works until authorisation has been obtained by your insurer, as this may affect your ability to claim.
Under most Comprehensive insurance policies you are free to choose the garage to repair your vehicle; however there are some factors which may reduce the claimable amount under your policy.
With any type of motor insurance in Hong Kong, an excess (or ‘deductible’) is usually applied, and the amount depends on the type of claim being made and who was driving the vehicle at the time of the accident).
However, insurers in Hong Kong will also apply a certain amount of depreciation when calculating the claimable amount for own-damage. This can also be referred to as “betterment”. This means that new replacement parts and repairs to your damaged vehicle can actually increase the overall market value of your vehicle, and this ‘betterment’ amount is deducted from the claimable amount, as your vehicle can only be insured up to the current market value, up to the sum insured. This means that the claimable amount for own-damage repairs will be the repair cost minus the excess minus the depreciation. This is standard practice among insurers in Hong Kong for claims for own-damage.
All property insurance is based on the value of the item insured. This may be a sum insured specified by the policy holder, an agreed value, or simply specified as the “market value” (replacement value). Most motor insurers in Hong Kong will require you to specify the value of your own vehicle, and the annual premium is based on this sum insured.
If at the time of a claim the insurer finds that you have under-insured your vehicle (insured a sum lower than the actual market value), then the clause of “Average” will be applied, which means you will be penalised for not paying the full premium (based on the higher value) and the claimable amount reduced, by the same proportion of under-insurance. For example, if your vehicle is worth HK$100,000, but you only insure it for HK$80,000 (only 80 percent insured), the maximum claimable amount would be HK$64,000 (80 percent of the sum insured) minus the excess minus depreciation where applicable.
If at the time of a claim the insurer finds that you have over-insured the vehicle, the maximum claimable amount will still only be the market value including depreciation and minus the excess where applicable (you cannot profit from the insurance).
Under a Comprehensive policy some insurers will simply state that your vehicle is insured “up to the market value,” however most insurers will require you to inform them of the value of your vehicle, which is then used to calculate the annual premium. Unfortunately in Hong Kong there is no “book value,” as such, for the various models, and the insurer cannot tell you the value of your particular vehicle. In this case, to determine the value (which may not be the same as the purchase price, especially if you have got a good deal) you may want to compare similar models on dealer websites or contact dealers directly for advice.
Some insurers offer extra benefits for Comprehensive policies, which may include a New for Old clause (usually up to one year after first registration in Hong Kong), NCD protection and a towing service. Some insurers also provide 24-hour roadside assistance similar to AA cover, to varying levels depending on the insurer.
Free Comprehensive Car Insurance Quotes
If you would like to receive a free quote for a comprehensive car insurance policy in Hong Kong, simply complete the short form at the top of this page and select Car Insurance from the drop down menu. Once you have submitted a request an expert Hong Kong car insurance broker will contact you directly with an extensive quotation overview comparing all the leading plans currently on the market.
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