Author
Bowtie Team
Updated on
2025-07-09
Disclaimer: This article is translated with the assistance of AI.
If you’re a car owner in Hong Kong, you’ve likely heard of third-party insurance. But do you know what it actually covers? How does it differ from comprehensive insurance? And is it okay to have someone else buy it for you? Get all the answers here!
What Is Third-Party Insurance? What Does It Cover?
Under Section 4 of the Motor Vehicles Insurance (Third Party Risks) Ordinance (Cap. 272), it’s mandatory for all vehicle users (including owners and authorized drivers) to have third-party insurance. This legal requirement ensures protection for third parties injured or killed in accidents. You’ve probably heard it referred to as “third-party cover” in casual chats.
However, this “three-insurance” only covers third parties, including passengers in your car, but typically excludes the driver’s injuries or damage to your own vehicle. For broader protection, vehicle owners or drivers should consider comprehensive car insurance (often called “full cover”) along with medical insurance for accidents and hospitalization.
How Much Compensation Is Offered? What About Excess Fees?
For third-party liability insurance, the law mandates a minimum coverage of HK$100 million per incident for death or injury to third parties. However, property damage caused to third parties isn’t part of this mandatory coverage.
That said, most “third-party” or “full cover” policies in the market today not only provide the HK$100 million for third-party death or injury but also include at least HK$2 million for property damage. While many policies cover property loss, always read the fine print. Also, watch out for excess fees (deductibles)—you often need to pay this upfront during a claim before the insurer covers the rest.
For example, if third-party property damage costs HK$80,000 and the excess fee is HK$6,000, the insurer will only compensate up to HK$74,000. Quick tip: some insurers may waive part of the excess fee for registered named drivers.
Third-Party vs. Comprehensive Car Insurance: Key Differences
Third-party insurance only covers injuries, death, or property damage to others—it doesn’t protect the driver or your own car. Comprehensive insurance, or “full cover,” goes further by including damage to your vehicle, third-party legal liabilities, and losses from floods, fires, accidents, or theft. Some insurers sweeten the deal with extras like free towing, windshield replacement, or emergency support, though these might bump up the premium or come as add-ons with extra fees.
Think of “full cover” as third-party insurance with a beefed-up safety net. Naturally, with more protection comes a higher premium. Since comprehensive policies cover a wider range, they often involve more excess fees for things like vehicle damage, theft, or windshield repairs. So, when comparing plans, don’t just eyeball the premium or coverage—check the excess fees too, as they can vary wildly.
What Affects Car Insurance Premiums and Quotes?
Car insurance premiums hinge on several factors, with the driver’s age and experience topping the list. Many insurers charge higher premiums or demand larger excess fees for drivers under 25 or with less than 2 years of driving experience. So, if you’re still rocking that license as a newbie on Hong Kong roads, brace yourself for pricier insurance. Some companies even restrict online applications for those under 25 or with limited experience, requiring a direct application instead.
Your occupation can also nudge the premium up. High-risk jobs like construction work, journalism, or entertainment might lead to higher quotes. Vehicle price, age, and performance play a role too—generally, the pricier the car or the more powerful the engine, the heftier the premium.
One thing to note: most insurers stipulate that vehicles can’t be used for commercial purposes or rentals. If you plan to use your private car for ride-hailing or paid services, you’ll need the right passenger-carrying license and must inform your insurer to adjust coverage. If you haven’t insured yet, ask upfront. Why? If an accident happens and you file a claim, the insurer might deem the policy invalid, refuse compensation, or even pursue recovery from you after payout.
Can Someone Else Buy Third-Party Insurance on My Behalf?
In theory, the actual vehicle owner should purchase third-party insurance. But since premiums are steeper for those under 25 or with less than 2 years of driving experience, some folks get others to act as the “named owner” for cheaper rates. Honestly, I wouldn’t recommend this—it’s a risky move for both parties.
In reality, if an accident occurs, it’s not just the driver who’s liable—the owner often bears responsibility too. Some insurers require frequent drivers to be registered as named drivers. If you’re a regular driver but not listed, the insurer might deny your claim. Certain policies only cover named drivers, so read the terms carefully. And if you’re borrowing a car and an accident happens, unregistered drivers usually have to pay the excess fee.
Is Third-Party Insurance Enough?
While third-party insurance meets legal requirements, consider opting for “full cover” if your budget allows—it offers much broader protection. If you’ve bought a new car on loan, the lender (bank or finance company) often mandates comprehensive insurance to mitigate their risk. Even if you’ve paid in full for a new car, I still recommend “full cover.” Otherwise, you’re on your own for any vehicle damage.
Is Third-Party Insurance Only for Car Insurance?
Third-party insurance isn’t exclusive to car policies—it pops up in various contexts. For instance, home insurance often includes third-party coverage for accidental injury or property damage to others. And don’t assume only big projects need it. If you’re renovating your home, standard home insurance usually doesn’t cover renovation-related accidents. You’d need specific renovation insurance, which often includes third-party liability protection.
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