Hong Kong is a city of status, and after your home, the piece of property that may say the most about your status is your car. If you are one of the people in the SAR that is fortunate enough to have their own vehicle, you will no doubt enjoy the ease of getting around the city, and avoiding the throngs of commuters that stuff themselves into the city’s trains, buses, and taxis. Even so, owning a car can be both a burden and an investment, as buying a car comes with quite a few more costs than just what is on the price tag.
Besides the fact that securing parking spots for your vehicle in Hong Kong can cost as much or more than the vehicle itself, there are also the costs of fuel and regular maintenance. There are also legal requirements regarding car insurance, and the costs of this can really add up. We’re sure that current drivers are looking for ways to save money, and people who will start driving in the near future may have a lot to learn about car insurance in Hong Kong. Local car insurance broker Kwiksure explain more about car insurance requirements in Hong Kong, and where you might be able to save money on it.
Types of Car Insurance
Kicking off the discussion, it’s important to note the different kinds of car insurance that are available to drivers in Hong Kong. While there are numerous benefits and features that can vary between different insurers, and the different plans they offer, there are still only really three broad types of insurance on offer:
- Third party liability insurance – This is the most basic type of car insurance available on the market. Third party liability insurance provides benefits for injury or damage you or your vehicle may cause to a third party. This can be a life-saver when it comes to covering costs that you owe to others, but it does not provide any coverage for damages to your vehicle, or injuries you may sustain. Of course, this is all contingent on you being found to be at fault for any damages caused.
- Comprehensive car insurance – Comprehensive car insurance gives you all of the same coverage that third party liability insurance comes with, but with a big advantage: Any damages to your vehicle, even through your own fault, will be covered by your insurance policy. This type of plan will come with a significantly higher premium than third party insurance, as your insurance company will factor in potentially covering the value of your car. For this reason, with comprehensive plans, the more expensive your car, the higher your premium will be.
- Third party fire and theft insurance – Lastly, for additional coverage for your car, without paying for fully comprehensive car insurance, you can opt for third party fire and theft insurance. This type of insurance includes the same coverage of third party insurance, but also adds a layer of property insurance protection that will reimburse you for the cost of your vehicle in the event that it is stolen or damaged by fire.
Hong Kong Car Insurance Laws
Now that you’re familiar with the types of car insurance plans available, you should know which you are legally required to have if you drive in Hong Kong. All drivers must have at least third party liability insurance in order to be legal to drive. Such policies will cover the driver of the vehicle, and can allow them to drive multiple vehicles, depending on the specific terms of the insurance agreement.
It’s important that every driver possesses at least third party liability insurance so that nobody in the city is left to pay out of pocket for damages to their person or their property that occurred through the fault of any driver on the road. The maximum penalty for driving without third party liability insurance coverage in Hong Kong is a $10,000 fine, 12 months in prison, and the loss of driving privileges for up to three years.
So what can you do to keep your insurance costs low? Here are a few of the underwriting factors that you can take advantage of when it comes to car insurance:
No Claims Discount (NCD) – Being a safe driver pays. For each year you drive without making a claim on your car insurance policy, you will likely receive a discount on your premiums when your policy renews. This starts after the first year – often starting at a 20 percent discount – and subsequently raising 10% each claim-free year until a policyholder reaches the maximum discount of 60 percent off. Be careful, though, as any accident leading to a claim can result in a 30 point reduction off your NCD.
Vehicle type – As mentioned before, if you have comprehensive insurance, the value of your vehicle will be considered when deciding your premiums. Besides this, every car insurance policy of any type will take the year, make, and model of your car into account during underwriting. The newer your car, the lower the risk of mechanical failure leading to an accident, so newer cars will generally receive lower premiums.
Occupation – If you happen to work in certain portions of the entertainment industry (such as being an actor, singer, or otherwise a celebrity), or if you work in a field related to automotive repair or sales, you may have to pay a higher premium.
Age – While this isn’t something you can change, you should be aware that drivers between the ages of 30 and 60 tend to receive the lowest car insurance rates. Young and senior drivers should expect to see higher premiums than people within this age range.
Now that you have the information you need to approach Hong Kong car insurance with a basic understanding of the topic, you may want to revisit your existing plan, or examine what else is available on the market. There are many options out there, though, and whittling them down to the ideal car insurance plan can be a real challenge.
Never fear though. The helpful Hong Kong car insurance experts at Kwiksure are available to assist you in your quest for the perfect car insurance plan. Contact them today to get started on the path to saving money while staying road legal. They can provide you with a comparison of plans from top insurance providers, and give you a free price quotation.