Methods of Settlement 結清方式
The settlement method depends on the policy terms and whether the claim provides indemnity or a policy benefit. Money, normally paid by cheque or bank transfer, is the most common method. Some benefits, such as personal accident benefits payable to the insured, can only be settled in money. Without specific policy terms, a non-monetary settlement needs mutual consent; property policies commonly give the insurer a choice of other methods of indemnity.
Direct payment to a repairer is common for partial losses, particularly motor damage. It reduces the risks of paying cash against an inflated estimate and of the insured keeping the money without arranging repairs, or retaining the difference after poor, cheaper repairs. A reputable repairer, or one personally recommended by the insured or third party, helps reduce disputes over workmanship.
Replacement supplies another item in place of the lost or damaged property. Replacing an old item with a new one may require agreement on depreciation and the claimant's contribution towards betterment. Replacement therefore works more readily for items that depreciate little, such as some jewellery and precious watches, and for new or nearly new items.
Reinstatement here means returning insured property to its condition immediately before the damage, and overlaps with repair and replacement. For a destroyed building, it includes demolition and rebuilding. It may also suit a case where the claimant greatly overestimates the building's value but rebuilding would cost less. Workmanship can still cause disputes; although the insurer may hold the contractual choice, it rarely forces an unwanted method on the insured.
Claims Dispute 理賠糾紛
Arbitration resolves disputes outside court proceedings. It is less formal than litigation, and those representing the parties or deciding the dispute need not be legally qualified. A policy's arbitration condition binds the contracting parties. A third-party claimant is not a party to the insurance contract and is not bound by that condition.
A typical arbitration condition refers differences and disputes arising from the policy to arbitration under the Arbitration Ordinance (Cap. 609). If the parties cannot agree on arbitrators or umpires, selection is referred to the current Chairman of the Hong Kong International Arbitration Centre. If the insurer disclaims liability, the insured must commence arbitration within 12 calendar months from the disclaimer date or the claim is treated as abandoned; this requirement comes from the typical policy condition described here.
An arbitrator's award is final and binding on the parties. The typical condition also makes obtaining an award a condition precedent to bringing an action under the policy. Courts generally will not overturn a properly conducted arbitration; a clear error of law or evidence of bias against the claimant may justify intervention.
A general insurance policy may instead contain an Alternative Dispute Resolution Condition, or ADR Condition. The parties may mediate under the Hong Kong judiciary's applicable Practice Direction on civil mediation, while unresolved disputes must go to arbitration. A mediator helps the parties agree a settlement and cannot impose an outcome; an arbitrator issues a binding award.
Insurance Complaints Bureau (‘ICB’) 保險投訴局（投訴局）
The Insurance Complaints Bureau was formerly the Insurance Claims Complaints Bureau (ICCB). Under the 2022 study material, its claims adjudication service covers monetary complaints concerning personal insurance, with a claim amount or monetary value no greater than HK$1,000,000. The insurer must be an ICB member. A policyholder, policy beneficiary, insured person or rightful claimant, such as an assignee, may complain.
The insurer must have made its final decision on the claim or dispute. The complaint must reach the ICB within 6 months from notification of that decision. It must not arise from commercial, industrial or third-party insurance, or be subject to legal proceedings or arbitration.
On 16 July 2018, the ICB introduced mediation for monetary insurance disputes unrelated to claims. The same eligibility requirements, HK$1,000,000 limit and other restrictions described above apply. If the parties cannot settle despite the ICB's encouragement, they may choose a mediator from its list of qualified mediators with relevant experience and qualifications. The service is free to complainants.
Non-claim related mediation excludes complaints solely about service quality or an insurer's underwriting decision. Disputes about investment performance or the level of a fee, premium, charge or interest rate are also generally excluded. An exception applies where the dispute concerns alleged non-disclosure, misrepresentation, incorrect application, negligence, breach of a legal obligation or duty, or maladministration by the insurer; the other eligibility conditions must still be met.
Practice
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