Motor Insurance

Motor insurance in Hong Kong is what is sometimes called automobile insurance or car insurance in other countries. The most comprehensive form of this type of insurance is designed to protect you against damage to your own vehicle, injury to the driver and occupants, and liability for property damage or bodily injury caused to 3rd parties.

Just like how home insurance policy insures your home and a life insurance policy insures your life, motor insurance protects your vehicle.

In Hong Kong, motor insurance is mandatory. All vehicle owners who operate their vehicles on public roads and highways must have a valid driver’s license and proof of third party liability motor insurance. All vehicles must have a minimum limit of HK$100 million for death or bodily injury and HK$2 million for property damage.

Once you’ve satisfied those minimum requirements, you can optionally choose to increase 3rd party liability limits, add coverage for loss of or damage to your vehicle as well as medical expenses coverage for the driver and passengers of your own vehicle that are injured in a motor vehicle accident.

There are also additional coverages available such as windshield replacement, rental car expenses if your vehicle becomes inoperable, towing, reduced depreciation on payouts, and much more.

All vehicles that operate on public roads in Hong Kong are required by law to carry third party coverage with minimum limits of insurance (HK$100 million for death or bodily injury and HK$2 million for property damage). If you injure a 3rd party (i.e. another driver or pedestrian) your third party insurance would kick in to compensate them for their losses.

If you’ve purchased the optional comprehensive coverage, then you’ll also have coverage for damage to your own vehicle and medical expenses of the driver (i.e. the insured) and passengers of the insured vehicle.

All vehicles operated on public roads in Hong Kong are required to carry proof of third party insurance. You can verify whether a vehicle is insured or not by reviewing this document and seeing if it’s up to date and the information on the document is correct.

Driving is a hazardous activity and no matter how careful you are, accidents can happen. If you carry proper motor vehicle insurance, you will have the funds necessary to compensate 3rd parties if you are found liable for causing them death, bodily injury or property damage. Without insurance, not only are you breaking the law, they could pursue you in court for damages. Lawsuits are long expensive affairs (even more so if you lose) and can cause you serious financial harm if you don’t carry motor insurance.

Without the optional comprehensive coverage, you’ll have no coverage in accidents where you’re at fault for medical expenses or to repair or replace your own damaged vehicle. This can be a major source of financial loss if you do not carry comprehensive motor insurance.

Generally speaking, there are 3 major types of motor insurance coverage for Hong Kongers to choose from.

This is the mandatory coverage that all vehicles operated on public roads in Hong Kong must carry. It insures your liability to 3rd parties if you have caused them any bodily injury (including death) or property damage.

This is an optional coverage to add on top of the mandatory third party coverage that covers damage to your vehicle itself – even if it was your fault. It covers loss of or damage to the insured vehicle in a variety of circumstances including: damaged in an accident, damaged by an uninsured or under insured driver, or other non-collision type damages such as theft or vandalism.

After that, you have many optional coverages to choose from if you want to enhance the level of protection you get from motor insurance. For example:

Windshield and Glass Insurance: this coverage pays for damage to the windshield as well as side and rear windows up to the limits chosen.
No Claims Bonus Protection: this allows you to retain your no claims bonus even if you have a claim as long as it doesn’t surpass the chosen limit.
Roadside Assistance: this coverage will reimburse you for roadside assistance such as replacing a flat tire, jumping a dead battery, helping you back into your vehicle if you’ve locked yourself out, towing costs, etc. up to a certain limit.
Rental Reimbursement: this pays for all expenses associated with renting an alternate vehicle if yours was stolen or in repairs following an accident. Keep in mind that this coverage has a per day and per accident limit.

In Hong Kong, much like in most other developed countries, motor insurance is compulsory for all vehicle owners. This is because as careful as you are, driving is a dangerous activity that can cause serious injury, loss of life, or property damage to 3rd parties (pedestrians, other drivers, etc.). To reflect this danger, the Hong Kong government makes motor insurance compulsory in order to ensure all drivers have the means to compensate innocent 3rd parties that have been harmed by the driver.

That said, only 3rd party liability coverage (with compensates 3rd parties if you’re found responsible for their injury, death or property damage) is mandatory in Hong Kong. Other coverages such as protection for damage to your own vehicle or medical expenses coverage for drivers and passengers are optional.

You are required to carry limits of at least HK$100 million in 3rd party liability coverage for bodily injury or death and HK$2 million for property damage.

Driving is a dangerous activity and through lapses in attention or through no fault of your own, accidents can happen. While there is no limit to how many claims you can make on your motor insurance policy, making claims can affect the premiums you pay for motor insurance in Hong Kong. If you’ve had many accidents, you may be considered a high risk driver and need to pay more for insurance.

If you have a history of safe driving and haven’t made any claims for a certain period of time, insurers will grant you a No Claims Bonus. This is a discount on your motor insurance premiums to reward your safe behaviour on the road.

For private cars, the typical discount for 1 claim-free year is 20%, another year earns you 30% and so on up to a maximum of 60% off after 5 years of claims free history.

If you’ve purchased a comprehensive policy, if you’ve had less than 2 claims within a policy year with a combined value of under HK$50,000 or 15% of the vehicle’s value (whichever is less) you can keep your No Claims Discount. Any more than that, and you’ll lose it.

Whenever you get into an accident, the first thing to do is to stay calm. Then you want to assess the extent of the damage/injury and provide first aid if necessary. The most important thing is that everyone is safe. After that, you’ll want to take photos of the damage and the scene and take down the contact information of the other driver(s) and witnesses on scene.

Once you’ve done this, contact your motor insurance broker and ask them to help you prepare the claims information. It’s important that you submit an accurate and comprehensive notice of claim to the insurance company in order to make sure the claim goes smoothly and you get the compensation you deserve.

Third party insurance is the mandatory part of motor insurance in Hong Kong. It is designed to respond to cover your liability to third parties for any death, bodily injury or property damage you may have caused as a result of your use, operation, or ownership of a motor vehicle.

The difference between this and the optional coverages is that third party coverage is designed exclusively for the protection of others whereas optional coverages are designed to protect the insured themselves for their own medical expenses or repair costs for their own damaged vehicle.

No. Each vehicle that will be operated on public roads and highways must carry its own car insurance and no switching between vehicles is allowed.

This is because much of the premium for your car insurance is determined by the type of vehicle you drive and the usage of that vehicle. A Ferrari would be much more expensive to insure than a Toyota because the car itself is more expensive and since it can reach higher rates of speed, more “dangerous”. Similarly, a truck used for deliveries will be much more expensive to insure than a vehicle intended for pleasure use by a homemaker who only drives to pick up the weekly groceries. This is because the delivery truck spends much more time on the road which increases the chances of getting into an at-fault accident.

With this in mind, it wouldn’t make sense to allow insurance policies rated for one vehicle and one usage to be swapped to another vehicle which may be more expensive and be used more frequently.