Car insurance covers in Hong Kong vary based on the type of motor vehicle, usage and covers you require. Examples include: third party motor insurance, motor insurance coverage for the vehicle itself, and motorcycle insurance.
When most people in Hong Kong walk or take the MTR to work, owning a car, motorcycle or other motorized vehicle is considered a luxury here in our small island city. That said, with this great freedom also comes some responsibilities.
According to Hong Kong law, every vehicle must carry insurance to cover their liability for bodily injury or death and property damage liability caused to 3rd parties with a minimum limit of insurance of HK$100,000,000. Without this minimum insurance, your vehicle would not be legally allowed to drive on public roads.
Once this minimum requirement is fulfilled, there are other optional coverages clients can choose to insure their own vehicle against a variety of different losses such as fire, theft or collision.
Third Party Only
This coverage is the minimum motor insurance coverage required in Hong Kong. You must carry at least this coverage in order to operate your car on public roads.
Like in many other parts of the world, the Hong Kong government recognizes that owning and operating a motor vehicle is a hazardous activity with the potential to cause large amounts of property damage and bodily injury or death to innocent 3rd parties. As a result, a law was put in place requiring those who own vehicles to carry Third Party Liability coverage.
As the name implies, this is a 3rd party liability policy. Which means it covers your liability when a claim is brought by a 3rd party alleging wrongdoing on your behalf. In Hong Kong, Third Party Only car insurance covers your liability for any claims brought against you by a 3rd party alleging property damage, bodily injury or death due to the use, ownership, or operation of a motor vehicle by you or someone on your behalf.
For example, this policy would kick in if you were to get into a car crash where you were at fault. Similarly, if you had hit a pedestrian and they brought a legal claim against you, your Third Party Only policy would step in to defend you.
Much like other types of liability policies, this 3rd party policy will also pay for supplementary costs like legal defense on top of the damages the court orders you to pay should you lose.
Exclusions
Because Third Party Only car insurance is the most basic cover available in Hong Kong, it only provides minimal coverage. For example, this policy will usually not cover:
- Damage to your car and the property carried within
- Broken windshields due to debris
- Injury or death of the insured(s)
- Roadside assistance such as help repairing a flat tire, starting a dead battery, or gas deliveries
Third Party Plus Fire and Theft
Third Party Fire and Theft auto insurance policies are the same as Third Party Only but also include coverage for fire and theft damage to your vehicle. This type of car insurance policy is for people who only want the minimum coverage but also some extra property coverage for their own vehicle to protect against some common losses.
Comprehensive Auto Coverage
One glaring flaw with the 3rd party insurance discussed above is that it only protects you from legal liability for claims brought on by 3rd parties. There is no coverage for your own vehicle, the driver, or your occupants.
To address this, we usually recommend clients purchase Comprehensive Auto Cover.
Comprehensive Motor Insurance policy covers you, your vehicle, and third-parties in addition to some useful benefits:
- Roadside assistance such as vehicle towing or roadside repairs
- Enhanced cover for damaged windshields (ie. damage caused by roadway debris)
- Claims free discount or no claims discount (NCD)
- Reduced depreciation or “new for old” replacement if your car suffers a total loss
Personal Accident Cover
This optional additional cover is meant for drivers who want to get some additional cover for personal injuries. There are typically various tiers of coverage available but generally speaking, getting this additional cover will give you better medical coverage as well as improved roadside assistance for when you get stranded on the motorway.
Exclusions
Even though the 2 optional covers we discussed above are quite comprehensive and offer protection against most accidents, there are some important exclusions all insureds should be aware of:
- The insurer will not pay for injuries or property damage due to the influence of alcohol or illegal drugs (ie. no coverage if you crash while driving drunk)
- For Comprehensive and Personal Accident covers, many insurers will not insure your vehicle if it is over 10 years old
Learn More About Car Insurance in Hong Kong
While we mainly focused our conversation around cars, the same general coverages will apply to all motorized vehicles subject to insurance legislation in Hong Kong - including motorcycles.
To learn more about motor insurance for your vehicle or the motor cycle insurance company(s) we recommend right now, get in touch with a licensed motor insurance broker at Trusted Union.
