What car insurance is right for you?

If you have recently purchased a car, or are thinking about buying an automobile in the near future, then you’re going to need insurance. Unfortunately, there are many options out there – and some car insurance products are not going to be suitable for every need.

The owner of a 1993 Honda CRV is not going to need, or want to pay for, a comprehensive policy, while a brand-new Tesla will likely want more expansive cover.

Join us as we examine your car insurance options in Hong Kong, and help you decide what coverage is best suited for your needs.

Do you really need car insurance in Hong Kong?

In order to register a vehicle to operate on public roads you must prove to the Transport Department that you have obtained Motor Insurance for the vehicle. Without obtaining insurance you will be unable to register your vehicle.

Under the Road Traffic Ordinance, Cap 347 specifies that a public road is any highway, thoroughfare, street, lane, alley, car park, passage, or way which the general public shall have access either continuously or intermittently, whether or not it is government property.

Operating a vehicle (including motor powered bicycles and skateboards) on public roads, without first registering it, incurs a fine of HK$ 5,000 and 3-months imprisonment upon the first offence.

It’s also important to note that even if a road is “private” you can’t operate an unregistered vehicle on it without first notifying; the simplest way to ensure compliance with the law, and avoid any issues is to register any vehicle you own before operating it in Hong Kong.

To do this, you need Hong Kong car insurance in order to satisfy your motor vehicle registration requirements.

What are the regulations for Motor Vehicle Insurance in Hong Kong?

It will not surprise you to learn that the requirements for insurance on a Vehicle in Hong Kong are mandated by the Hong Kong government, and can be found in the Motor Vehicles Insurance (Third Party Risks) Regulations ordinance, CAP 272, Section 20.

This states that a minimum amount of HK$ 100,000,000 is to be covered in respect of the policyholder’s liability towards third party damage or injury. Furthermore, the ordinance mandates that the insurance is issued by an Authorized Insurer in Hong Kong, and specifies at the drivers of the vehicle being insured is covered against their liability: in respect of death or bodily injury to any person caused by the use of a motor vehicle on a road and arising out of one event.

As such, it is important that you obtain your Hong Kong car insurance only from an insurance company authorized by the Hong Kong Insurance Authority to conduct such business, and that you ensure your car insurance covers you for at least HK$ 100,000,000 for any single accident you may have which results in death or bodily injury to a third party.

Third Party Car Insurance Coverage

While the minimum level of coverage required by the Hong Kong government regulates coverage only against bodily injury, Hong Kong car insurance products normally include property damage protection as well.

In fact, the most commonly available form of Third-Party Car Insurance (and consequently the cheapest) is:

• Third Party Death/Bodily Injury: HK$100,000,000
• Third Party Property Damage: HKS$2,000,000

This represents the basic option for Car Insurance in Hong Kong, and as such (depending on your driving history and the details of your car) is normally the cheapest.

Comprehensive Car Insurance

But what if you’re not looking for the cheapest possible policy on offer? Maybe you’ve purchased a brand-new car, and after paying all that tax have decided you would like to protect your new purchase.

Also containing the legally required Third-Party Death and Bodily injury coverage, “comprehensive” car insurance plans include protection against accidental loss or damage to your vehicle. While mechanical failures and breakdowns are not included in the coverage of comprehensive car insurance products, the fact that broad protection against “accidental loss or damage” is available provides far more coverage than a simple Third-Party Only car insurance plan.

Coverage and Car Insurance Premiums

The coverage you are receiving under your car insurance policy is the most basic way to understand premium differences. A Comprehensive Car Insurance plan will cost less than a Third-Party only policy.

However, there are variables that can increase your car insurance premium outside the coverage you are receiving under the plan, and these variables can have a significant impact on the cost of your insurance; to the extent that it may make owning a vehicle not financially viable.

Driver’s Age and Experience

Older drivers are usually much safer than younger, less experienced drivers. Consequently, if you are under the age of 25 your premium will be increased to reflect your higher risk. Additionally, if you have been driving for less than 2 years, you represent a higher risk and will have your premium adjusted appropriately.

Young and inexperienced drivers are, statistically, the most dangerous drivers on the road. They will normally pay more, even with basic insurance protection.

The Vehicle’s Age

Before even knowing about the make and model of the car being insured (we’ll get to that in a bit), insurer’s want to know how old a vehicle is. Older vehicles are generally less reliable than newer models, and those reliability issues present risk to the insurer holding the policy – especially if the car’s brakes fail while on the highway.

A member of the CCW Team actually had an engine fall out of an old motorcycle while commuting to work many years ago. The bike was 20 years old at the time it was being ridden, and hadn’t been properly maintained (by the current or previous owners).

This is the sort of risk presented by older vehicles, and is why insurers generally load (increase) the premium of vehicles over 10 years old.

Make and Model of the Vehicle

Some cars like to go fast, other cars have proven to be more likely to be involved in accidents. The make and model of your vehicle matter, especially if it is an older car or you’re a young and/or inexperienced driver.

Different insurers may not like the same cars, or an insurer may not like a car that is normally insured routinely by all the other Authorised Insurers in Hong Kong. With all the options available and the variables that go into producing a quote, this is the single most important reason to shop around when it comes to your car insurance; and get quotes from as many insurers as possible.

Choosing the Right Car Insurance

With all the different options and variables that are associated with Car Insurance in Hong Kong, either Third-party or Comprehensive coverage, it can be difficult to know exactly what policy is right for your needs.

At CCW Global we work with more than 60 leading Hong Kong and International Insurance companies, and our experience in the Hong Kong Insurance market means that we have answers to all the questions you have. With a variety of different Car Insurance underwriters, and myriad options when it comes to finding you the best possible policy, CCW Global will walk you through your choices in a no-obligation, no-cost discussion of what works for you.

If none of our insurance solutions are suitable for your specific needs, we will never pressure you into buying something that doesn’t work. So whether you’re new to Hong Kong, or just new to car ownership, Contact Us to start a conversation about how you can best protect your vehicle on the roads.