Buying insurance is one of the most important steps you can take to protect yourself from life’s uncertainties. You make a small investment that in turn transfers the cost of a potential loss to the insurance company. This allows you to secure your peace of mind and go about your life without having to worry about things you have no control over.

HK residents have a varied choice of insurance policies to select from. You may get home insurance to protect your property, health insurance to take care of unexpected medical expenses, business insurance to protect your source of livelihood, car insurance to preserve the value of your automobile, and life insurance to secure the future of your dependents. However, there are so many insurance brokers and agents in HK that it can be confusing just to identify the right policy options.

This post highlights 9 solid guidelines that you can use to identify the right HK insurance policy for your unique needs and goals.

1. Understand your insurance needs

Developing a clear understanding of your financial situations and needs is very important before you purchase insurance in HK. You need to understand the different types of policies available and decide which ones are most important. Keep in mind that certain types of insurance (e.g. car insurance and employees’ compensation insurance) are mandatory in HK. Health insurance can be very important given the high cost of healthcare in Hong Kong. Even if your employer provides a group health insurance policy, you may still need to purchase additional coverage (e.g. dental cover and maternity cover) to ensure that you are sufficiently protected. Other options that you should consider include business insurance (i.e. if you operate a business in HK) and life insurance. You want to start from a perspective where you clearly understand what you need before you even start assessing the solutions.

2. Shop around

Long gone are the days when you had to sit with an insurance agent at your kitchen table to discuss insurance options. Technology has really made it possible for consumers to research and compare options right from the comfort of their homes or offices. Before you settle on any one policy, you want to do some research to make sure that you are getting the best value for the money. There are various online tools that allow you to perform a side-by-side comparison of insurance policies from various companies. Working with seasoned and trusted insurance brokers such as Trusted Union can also go a long way to ensure that you get the best deal possible.

3. Read between the lines

Most insurance policies have fine print exclusions that specific conditions/circumstances under which the policyholder may lose their benefits. A chain is only as strong as its weakest link. You need to clearly understand the technical grounds under which the company may choose to deny coverage. For instance, some policies may specify that you cannot claim benefits if you have not been hospitalized for a specific minimum duration (e.g. 24 hours or 48 hours). Read the terms and conditions and ask your agent to provide explanations so you don’t miss out on anything.

4. Consider working with an independent agent

You may choose to work directly with an insurance company as long as you have done your research and are confident in the policy they are offering. However, in many cases, working with an insurance agent is the better option. Insurance agents are the first line of operators within the insurance sector. They play a critical role in the distribution of insurance products. An agent will have the time to clearly elaborate the ins and outs of each policy that you may be interested in. Furthermore, they typically sell insurance coverage from competing companies and will often help you to select the right policy based on your custom needs.

5. Review insurance companies’ history and reputation

Researching a preferred or suggested insurance company is very important before you give the go-ahead to purchase the policy from them. You want to know how long the company has been in business, where it operates, what products they sell, and what kind of reviews have they gotten from customers (particularly those who have filed a claim). If a company has been there for decades and appears to be doing well, then there’s a very good chance that it will be there (and come in handy) if you ever need to file a claim in the future.

6. Understand insurance companies’ financial strength

Financial strength is another important measure of the resilience of an insurance company. If there are difficult claim situations (or massive claims as has been the case with the COVID-19 pandemic), you want a company that can weather the storm. Taking a look at the company’s financial results over the last few years can give an indication of its financial standing. Independent review organizations such as A.M. Best assess the financial strength and ratings of global insurance companies and thus can provide valuable insights.

7. Select the appropriate level of coverage

The right insurance plan should provide appropriate coverage for your personal or business needs. While the cost of the policy can be a factor, it shouldn’t be the most important one. Keep in mind that “you get what you pay for”. The cheapest policy in the market is no good if it won’t come in hand and provide the requisite level of coverage when and if needed. Work with your insurance broker to assess a cost-benefit ratio that accommodates your budget constraints (if any) while also accommodating your unique coverage needs.

8. Check whether any discounts are available

Insurance companies sometimes offer discounts that are applicable under certain circumstances. These are meant to attract policyholders and almost always help you save money on coverage. Examples of these discounts include those offered for multi-car families, no-claims discounts, and premium discounts. When comparing policies, learn what specific discounts are available so you can select the plan that is most beneficial. Also, work with your agent to identify valuable discounts that might apply to your particular case.

9. Revisit your insurance needs annually

Your insurance needs will likely evolve from time to time. For instance, you may buy a new vehicle after you have already acquired car insurance for your primary vehicle. You may start a new business and thus require workers’ compensation and other types of business insurance. Your financial standing may improve and - as a result - you may want to buy better health insurance or a more valuable life insurance policy. Similarly, new risk exposures may emerge that you are not sure your existing policy can keep up with. Stay in touch with your insurance broker or company and reassess your needs on a periodic basis (this way, you can adapt your coverage as necessary).