Under the law of Hong Kong, purchasing car insurance to protect all road users is mandatory for all vehicle owners who operate their vehicles on public roads.
Third Party Liability Insurance
Third party liability insurance provides protection against liability for third party claims for property damage and/or personal injury or death, and therefore the beneficiary of the policy will be the person claiming against the policyholder. Under Section 4 of the Motor Vehicles Insurance (Third Party Risks) Ordinance (Cap. 272), a vehicle user is obliged to purchase an insurance policy with an authorised insurer in respect of third party risks to cover liability incurred in respect of death or injury to any person caused by or arising out of the use of a vehicle on the road.
Comprehensive Car Insurance
Comprehensive car insurance covers not only third-party liability (including accidental death or injury to third parties and/or damage to their property) but also damage or loss to the vehicle caused by theft and/or accidental damage to the policyholder's vehicle, providing wider coverage than the third party liability insurance.
No Claim Discount
No Claim Discount (NCD) or No Claim Bonus (NCB) is a feature of car insurance that gives a discount or bonus on the renewal premium for the following year if the policyholder has no accidental claims in the previous year. For example, if a driver does not have an accident or make any car insurance claim during the year of coverage, the policyholder will receive a rebate from the insurer for a discounted premium for the next renewal year, subject to specified conditions.
A driver whose name is not included in the Car Insurance Policy for either comprehensive car insurance or third party liability insurance is an unnamed driver, and thus, the car owner is responsible for paying the excess for the unnamed driver.
Unnamed drivers are usually drivers who are deliberately excluded from car insurance to save premium (e.g. high-risk individuals) and are not named on the policy claim application. Therefore, regardless of whether or not permission is granted by the car owner, an unnamed driver will not be covered by the car insurance if he or she has an accident while using the car owner's vehicle.
Unnamed Driver's Excess
A driver whose name is not included in the Covered Car Vehicle Coverage Form for either comprehensive car insurance or third party liability insurance is an unnamed driver, and thus, the car owner is responsible for paying the excess for the unnamed driver.
Excess for Own Damage
The excess for damage to own vehicle contents applies to the amount that the owner of an insured vehicle is required to pay in the event of an accidental loss or damage claim against the insured vehicle under a comprehensive car insurance policy.
The total vehicle theft excess is applicable to comprehensive car insurance. Therefore, when the insured vehicle is stolen and the owner files a claim, the car owner needs to pay the excess.
Excess for the Damage to Own Vehicle Contents while Parked
The excess for the damage to own vehicle contents while parked is applicable to comprehensive car insurance. When the car owner files a claim for the damage of his or her insured car as the car is unattended or has an accident when it is parked, the car owner is required to pay the excess.
Third Party Property Damage Excess
The third party property damage excess is applicable to the amount payable by the owner of the insured vehicle under comprehensive car insurance and third-party liability insurance in the event of a claim for third-party death, injury or property damage caused by the driver's negligence.