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Planning to drive in Hong Kong? It’s the more expensive option - plus, you’ll need to secure mandatory third-party car insurance. A common misconception is that car insurance covers you fully, but in reality there can be exclusion clauses (just like other types of insurance).
To make sure there are no unwanted surprises, our friends at Pacific Prime Hong Kong outline the top 6 car exclusion clauses in the SAR.
1. Failure to disclose and/or make false statements
If you don’t answer the insurance application form truthfully or knowingly withhold information - for example, you may have lied about who usually drives your car, where you park it, or what it’s used for - then insurers are likely to deny your claim if they find out you weren’t being honest.
2. Vehicle modifications without prior notice
As vehicle modification in Hong Kong is regulated, any undeclared modification violates insurance regulations, and any change in performance or value after a car modification will impact its insurance status. In other words, you may get lower-than-expected compensation.
3. Driving under the influence of alcohol or drugs
Getting behind the wheel after you’ve drunk alcohol and/or use drugs isn’t just illegal, it'll also revoke your car insurance. Some insurers spell this out clearly in policy documents, while others simply say that the plan will be revoked if any crimes are committed while operating the vehicle.
What about bodily harm?
The Motor Insurers Bureau of Hong Kong (MIB) stipulates that the insurer may still be liable if you’re driving under the influence and cause bodily harm to a third party. However, the insurer can get reimbursement from you through other channels (e.g. civil claims) afterwards.
4. Not having a valid driver’s license
You need a valid driver’s license if you’re going to drive. If not, then you can be charged by the police and the insurer can invalidate your car insurance. This exclusionary clause doesn’t need explanation because driving without a license is deemed as being incapable of driving safely.
5. Taking your vehicle out of the designated geographical area
Most insurance policies come with geographic restrictions and car insurance is no different. If you buy your car insurance in Hong Kong, then it won't cover you if you venture abroad. For those of you planning to drive outside of the SAR, be sure to ask about your options beforehand.
6. Renting out your vehicle for commercial purposes
It’s illegal to rent out or use your car for commercial purposes (such as driving passengers) in Hong Kong with just a private car insurance policy. As such, your car insurance can be revoked if you charge your passengers - leaving you and them without adequate protection.