All About Comprehensive Car Insurance in Hong Kong

Hong Kong roads are very convenient, and there is a route to almost every corner of the city. Where there are roads, there are vehicles; in fact, there are 821,832 units (mainly cars) registered vehicles in Hong Kong.

Many residents in Hong Kong own a car(s) and use it daily. When one owns a car, they are required to drive safely and obey Hong Kong law. However, no matter how hard the government tries to keep roads safe and enforce laws, accidents still happen. In 2023, 11,983 Hong Kong Road accidents occurred from January to October.

Third-party car insurance is mandatory in Hong Kong to protect the general public and help cover road accidents. Third-party insurance is crucial to protect the affected victim or assist in property damage repair. Although the minimum policy may not be enough and will not help the driver or personal car damage.

Fortunately, most insurance companies offer a comprehensive car insurance policy to provide a cover that benefits all. The article will explain what is comprehensive car insurance and why it is necessary in Hong Kong.

What Is Car Insurance?

Car insurance, also known as auto insurance, is a policy that protects drivers from the financial damage of a road accident. The insurance will cover accidents that occur due to the car, even if the driver is not directly the policyholder.

As mentioned, there are two car insurance policies: third-party and comprehensive car insurance.

Third-party car insurance is the minimum policy every car owner must legally own. The insurance will only cover financial payments (compensation) the driver must pay to a victim when the car has injured or damaged a third party. It will not cover the policyholder’s car damage or personal/ passenger medical care.

Comprehensive car insurance is the full package insurance. The policy protects third parties, drivers and even passengers. The article will explain the wide range of coverage in more detail.

Most Hong Kong drivers will purchase third-party car insurance due to the legal requirement. However, you need more and should opt for a comprehensive policy for adequate protection on the road.

Comprehensive Car Insurance Cover

Third-party Liability

The Hong Kong government makes third-party liability coverage mandatory for important reasons. It is a cover that is found in all car insurance plans. The cover ensures if car negligence causes injuries to a member of the public or damages property, the victim is compensated. The mandatory cover guarantees adequate compensation is paid, no matter whose fault it was.

For example, recently, a Tesla crashed into a fruit shop in the Hong Kong market. Thankfully, no one was injured in this case, but the shopkeeper lost many products and suffered structural damage.

In such situations, the third-party car insurance cover will financially reimburse the financial loss of the property damage. If there were any injured bystanders, the insurance would have also covered their medical bills and provided additional compensation.

Car insurance will ensure the driver at fault can appropriately pay victims, regardless of the driver’s financial situation. Third-party accidents could happen to any driver due to negligence, car malfunction or freak accidents.

Accident Vehicle Damage (Collision)

When involved in an accident, it is fair to provide compensation when it was your fault. Although in an accident your car may be seriously damaged too. Car repairs are costly, depending on the severity of the damage.

The damage could range from a scratch to a full collision breakdown. Your car may not be able to be used again due to the damage and will need quick repair. In many cases, serious repairs even take a few days. If a driver only has third-party car insurance, they will have to pay for all personal car damage out of their pocket.

Comprehensive car insurance is a blessing in such situations. The insurance will cover damage due to collision, with limits. The insurance will reimburse most of the costs needed to repair the vehicle as soon as possible. In some policies, car insurance will also cover the costs of a substitute rented car for a certain number of days (while the car is in the workshop).

With comprehensive car insurance, you will save thousands in Hong Kong. The insurance is the perfect example of ‘pay now and save later‘.

Freak Accident Damage

At some points, car damage may occur due to incidents out of anyone’s control. The damage can be as bad or worse than a collision and as expensive to repair. The freak accidents that can result in damage could include natural disasters, protests, sudden fires, or even falling objects.

For example, when there is a typhoon 8/10 or a black rainstorm, the strong winds and floods can damage the car internally and externally. After every severe typhoon, insurance companies have to reject many natural disaster compensation claims as drivers only own a third-party policy.

Only comprehensive car insurance will cover damage to personal vehicles due to freak accidents. The policy is a great advantage, especially in Hong Kong, with an increase in violent weather and construction sites on every corner. You never know when a freak accident could affect your car, even when you are road cautious.

Vandalism & Theft

Hong Kong is not safe all the time and everywhere. Hence, there is always a risk a criminal may vandalise your car or even break into it. Criminals have a strong base of knowledge about which cars are easier to steal and where cameras may not spot them.

In fact, from January to September 2023, there have already been 394 Hong Kong vehicle theft cases. In addition, vandalism can include break-in damage, car body key scratches, spray paint or other unwanted damage for no apparent reason.

When a car owner has comprehensive car insurance, vandalism and theft will be covered. The theft coverage will include reimbursement of a portion of the car after a police report has been created. The loss of car payout will depend on the car’s age. Theft cover may also protect belongings inside the car, including keys. On the other hand, the vandalism will cover most of the repair costs.

Hong Kong is relatively safe, but such crimes occur even in the safest country.

Medical Expenses

The most unfortunate situation that occurs during accidents is the injuries. No matter whose fault it is, car accident injuries are devastating and can be very serious.

In a car accident, the driver, the passenger and the third party can get seriously injured. The third-party cover will financially help the third party, not the driver at fault and their passengers. Personal injuries due to a collision can result in expensive bills that the driver is meant to pay.

Comprehensive car insurance will cover personal injuries for the driver and passengers. The insurance will cover medical bills that are related to the accident. The medical cover will cover any medical treatment needed to recover, including dental and surgery, as long as it was directly due to the collision. However, every insurance has a limit it will cover.

Why Do You Need Comprehensive Car Insurance in Hong Kong?

Accidents can occur in any country or city, and having the minimum insurance sometimes is not enough to recover. Comprehensive car insurance can benefit every driver on the road due to the wide range of coverage.

Car repair and personal medical bills can be costly, and with the proper high-quality car insurance, you just need to worry about getting better. Some insurance companies even provide personal accident insurance extension, which offers higher medical coverage and compensation if the driver or passenger is disabled.

Comprehensive car insurance premiums may be more expensive than third-party car insurance, but it will be worth it in an unfortunate situation. It is also essential to understand the premium is calculated depending on the car’s age, model & brand, living location, and driver’s experience.