Case Study: Motor Insurance Claims in Hong Kong

At CCW Global we believe that transparency is critical to your successful ownership of an insurance policy. Our mission goes beyond simply advising you on what coverage may be suitable for the various risks you face; we also work to empower you with the knowledge and insight needed to navigate the often-complex world of insurance.

Offering real world examples can provide key insights into how you are able to more effectively utilize any insurance policy you purchase – as well as the benefits of having a dedicated, independent broker, supporting you over the lifetime of your coverage.

Here we present a Third-Party Motor Vehicle claim that offered unique challenges and complications.

Introduction to the Case

While Third Party Car Insurance is extremely common in Hong Kong, by virtue of the fact that all drivers operating vehicles on public roads are legally required to possess a policy, it is not without its own difficulties.

Despite being one of the simpler forms of coverage, protecting an every day risk in a straight forward manner, in this instance problems arose due to current events and the policyholder’s own life – which were further exacerbated by the Covid-19 pandemic.

Third Party Insurance Claim Background

During the Global Covid-19 pandemic, and subsequent quarantines, one CCW Global client found themselves out of Hong Kong for a prolonged period.

Throughout this time, their hired driver, named on their car insurance policy, regularly used the vehicle for household chores and errands.

During the 2021-2022 insurance policy year, an accident occurred involving our client’s vehicle, while being operated by their driver, resulting in damage to a Third Party's vehicle.

Notification of Third-Party Claim and Initial Complications

As the policyholder was overseas there were communication lapses, meaning that they were only able to notify CCW Global and the underwriter of their claim after a significant period of time had passes since the accident.

During this time the Third Party involved in the accident was chasing the policyholder, and Insurance Company, to provide compensation for their vehicle so they could get it repaired and repossess their car.

Motor Vehicle Insurance Company Response

In response to the Third Party, the Insurance Company stated that they would be unable to handle any claim or settlement without first reviewing the outcome of any affiliated Police Prosecution.

Upon relaying this information to the policyholder, CCW Global followed up, requesting the documentation (including the official claims form and any police reports) from the policyholder so as to finalize the claim.

However, despite persistently chasing the policyholder for additional information, the client did not respond for almost a full calendar year – during which time the ability to process the claim was hindered.

No further investigation could be attempted without supporting documentation.

Delay of Claim and Escalation

Roughly one year after the accident, the underwriter received a demand letter from the Third Party’s Insurance company – the same insurance company that was covering our client.

The claim was being handled by the same insurance company on both ends, as both parties had purchased their coverage from the same underwriter.

However, because of the extensive delay in communication with our Client, and the absence of claim critical documentation from the accident, the insurance company resolved to close the claim with no further action citing “breach of insurance contract terms regarding prompt notification and cooperation.”

Exceptional Negotiation and Resolution

CCW Global once again attempted to reach out to the policyholder, who was able to clarify that their prolonged absence from Hong Kong pandemic left them unaware of the demand letter, prosecution outcomes, or the attempts to close out claims.

The hired driver, who was operating the vehicle at the time of the accident, independently attended legal proceedings and was subsequently convicted of careless driving.

Because of the complexity in the case, and the client’s unique personal situation in this scenario, CCW Global intervened on their behalf, negotiating a resolution to the claim directly with the Insurance Company. As part of this advocacy, CCW Global arranged for the insurer to agree to handling the claim on an “Exceptional Basis” despite the earlier breach of contract.

As part of the agreement to handle the outstanding claim, the insurance company chose to backdate adjustments to the renewal terms for the policy period of 2023-2024 – as the insurer had renewed the policy without the claim being handled, this would now need to be factored into the continuing coverage.

Adjustments to the Car Insurance policy included a reduction of the client’s No Claims Discount, and an overall increased premium loading to reflect the increased risk of the accident. These changes were provided to the client by the insurer along with a retroactive invoice for an additional renewal premium.

Client’s Decision and Final Outcome

The new terms offered by the insurance company for continuing coverage were not acceptable to the CCW Global client. The client indicated that had these terms been presented when renewing the policy, they would not have agreed to proceed with the insurance coverage.

The client refused payment of the additional premium and opted to not renew or extend their policy further.

Key Findings and Recommendations from this Case

What started as a fairly straight forward claim, a Third-Party Accident with a named driver, turned into a complicated situation due to a number of factors – not the least is that life happens and sometimes it isn’t possible to respond to every single email you receive during a time of stress.

However, some major takeaways are as follows:

1. Prompt Notification of Accidents

When it comes to managing your car insurance claim, quickly and clearly notifying your insurance company and/or intermediary is of paramount importance. The quicker your insurance knows that a claim is happening, the faster that claim can get resolved.

2. Clear Communication with Insurance

Ensuring that you are responding to communications from your insurance partners can help to manage any claims situation efficiently. This is especially true if you are abroad, or expect to be in a location where communication is difficult. Check your emails regularly, and if possible, call your broker to see if there have been any updates or changes in the situation.

3. Work With a Broker

Choosing to work with an experienced an independent broker like CCW Global can help to avoid many of the pitfalls in the claims process. In this instance, even though the client chose not to proceed with renewal terms, a resolution was still available that may not have otherwise been attainable.

By leveraging CCW Global’s experience, and extensive connections within the Hong Kong and Global insurance markets, you are choosing to access a partner who can help you navigate complicated claims scenarios efficiently – ensuing that you always get the insurance protection you pay for, and safeguarding your interests with continued, reliable coverage.

Free Hong Kong Insurance Advice

For more information about Car Insurance, Insurance Claims, or how an insurance broker may be able to help you please Contact Us Today.

Alternatively, you can complete any of the short forms on our website and a dedicated insurance advisor will follow up with you directly.

Ask CCW Global – where your insurance is always Swift, Simple, and Sorted.