Private Vehicle 私家車
Private car classification depends on use rather than body design. A typical policy permits social, domestic and pleasure use and the insured's business or profession, but excludes hire or reward, racing and motor trade use. Third Party Only covers legal liability for third party death, injury and property damage. Third Party, Fire & Theft adds fire and theft loss of the insured vehicle. Comprehensive adds 'all risks' own damage cover, subject to exclusions.
Subject to statutory exceptions, the Motor Vehicles Insurance (Third Party Risks) Ordinance (Cap. 272) requires at least HK$100 million any one event for third party death or bodily injury liability arising from vehicle use on a road, excluding employers' liability and contractual liability. Roads include private roads except those in areas wholly or mainly used for construction work or industry. Act Only covers statutory liability; third party property damage insurance is not compulsory. Private car policies customarily provide HK$2 million any one event for third party property damage, increasable for an extra premium. [IA study notes, section 1.1](https://www.ia.org.hk/en/supervision/reg_ins_intermediaries/files/P2_2022_StudyNotes_Eng_2023corrigendum.pdf#page=11)
Own damage provides indemnity up to the car's reasonable market value at the time of loss, including accessories and spare parts fitted to it. Typical exclusions include consequential loss, depreciation, wear and tear, breakdown itself and tyre-only damage; resulting collision damage is not necessarily excluded. Applicable excesses can accumulate, including unnamed, young and inexperienced driver excesses. Young usually means under 25; inexperienced usually means holding a valid non-provisional driving licence for less than two years. Medical expenses cover reimburses insured medical costs; personal accident benefits pay specified amounts to eligible named drivers driving at the time.
No Claim Discount (NCD) reduces the renewal premium rather than paying a cash bonus. A typical private car scale rises from 20% after one claim-free year to 60% after five consecutive years. Under the step-back system, a current 50% entitlement falls to 20% after one claim. Two or more claims at 50%, or one claim at 20%, 30% or 40%, leave no renewal discount. A claim can affect NCD even without the insured's fault. Insurers recognise earned NCD on transfer. NCD protection can preserve the discount where total claims remain below a specified level, but the protected discount cannot transfer to another insurer.
Motor Cycle 電單車
Motor cycle insurance is primarily intended for private social, domestic and pleasure use. Commercial use, such as food delivery, must fit the policy's stated use restrictions. As with other motor insurance, the rider must meet the definition of an insured driver and the licensing conditions. A permitted rider need not be a named driver to have cover, although an unnamed driver excess may apply. The geographical area is normally Hong Kong.
Where own damage or accidental damage cover is purchased, note the theft condition: a theft claim is admissible only if the whole machine is stolen. Theft of accessories alone is excluded. A standard excess usually applies to loss of or damage to the motor cycle, except loss arising from fire or theft.
Distinguish liability caused by a passenger from liability owed to an injured passenger. Cover for a passenger's own liability is not usually provided, whereas liability for a passenger's death or injury must be insured. The statutory minimum for third party death and injury is HK$100 million any one event. Market cover for third party property damage is HK$1 million any one event, increasable for an extra premium. There is no standard medical expenses section or extended personal accident cover. [IA study notes, section 1.1.2](https://www.ia.org.hk/en/supervision/reg_ins_intermediaries/files/P2_2022_StudyNotes_Eng_2023corrigendum.pdf#page=22)
For motor cycles and commercial vehicles, typical NCD rises from 10% after one claim-free year to 30% after three consecutive years; one claim removes the following year's discount. All motor classes require attention to the insurance certificate: the insurer must issue it in the prescribed form before the policy becomes effective for compulsory insurance purposes. Within seven days of cancellation taking effect, the insured must surrender the certificate or make a statutory declaration if it is lost or destroyed. These seven days are not a grace period for driving without an issued certificate after buying insurance.
Commercial Vehicle 商用車輛
Commercial vehicles include taxis, light vans, buses, container lorries and specially constructed or adapted vehicles. Their underwriting terms cannot be assumed to be identical. Own damage is usually written on an 'all risks' basis, with an additional exclusion for damage caused by overloading or strain. This is an important difference from private car and motor cycle cover.
The statutory minimum for third party death and injury is HK$100 million any one event. Standard third party property damage cover is HK$1 million any one event, increasable for an extra premium. Additional exclusions concern use as a tool of trade, such as a digger excavating, subject to compulsory insurance requirements; food poisoning from mobile food vending; damage to stock-in-trade and specified equipment on the vehicle; and damage caused by vehicle vibration or weight to roads, weighbridges or things beneath them. Basic policies exclude medical expenses, although these may be added for an extra premium. [IA study notes, section 1.1.3](https://www.ia.org.hk/en/supervision/reg_ins_intermediaries/files/P2_2022_StudyNotes_Eng_2023corrigendum.pdf#page=23)
Underwriting and premiums consider factors such as vehicle type, carrying capacity, use and regular drivers. Special risks, including ambulances and undertakers' vehicles, need special terms. A fleet comprises vehicles under common ownership or management, normally rated using that fleet's own loss experience. A minimum of five vehicles may be specified; it is not a universal statutory threshold. Motor trade insurance meets the needs of businesses such as vehicle dealers, repairers, cleaners and recovery operators, with cover for road use, premises risks or combinations of these.
A tropical cyclone warning signal no. 8 or above does not automatically suspend every motor policy, although some commercial vehicle policies expressly prohibit use then. War, terrorism and nuclear risks are generally excluded, subject to compulsory insurance requirements. Contractual liability assumed only through an agreement is also excluded; liability that already arises from negligence is different. Distinguish policy cover from statutory third party rights: certain restrictions or breaches after an accident cannot defeat compulsorily insured claims, but the insurer may recover its payment from the person held liable.
Practice
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