The difficulty of comparing motor insurance plans lies in the fact that you are not only comparing prices but also a plethora of other factors, such as the insurer’s service standard, and the scope of coverage. Shopping only by price may mean sacrificing some of the protection you should have. That’s why most drivers choose to seek free, impartial advice from a reputable motor insurance specialist. For drivers who would like to consider different insurance plans by themselves, here are 5 dos and don’ts to follow when shopping for car insurance.
Don’t go with the cheapest plan
This is one of the most important rules to follow. All Hong Kong drivers are mandated to secure at least a third party insurance plan, which provides coverage for at least HKD 100,000,000 for any event resulting in death or bodily injury to a third person. Most third-party insurance plans in Hong Kong will generally provide HKD 2,000,000 towards covering property damage, but this is not a legal requirement and you may not find this coverage in cheap insurance policies. Even though the plan meets the requirement of the law, it may not offer you enough protection should you are involved in a collision or an accident, and thus you may end up having to pay for the coverage gap out of pocket.
Aside from inadequate coverage, cheaper plans tend to have poorer customer support and tighter claims timeframes. In 2016, there was even a car scamming ring selling fake car insurance policies, which once again prove that some cheap auto insurance plans are just too good to be true. Read our previous article on the risks of cheap car insurance to learn more.
Do take your age and experience into account
If you are under the age of 25 or have a probationary license, you may find that your premium is two to even three times more expensive than other drivers. This is because these drivers are statistically more likely to be involved in a collision or commit traffic violations so insurers usually charge them with a higher premium to defray potential costs. If you are trying to secure insurance for high-performance vehicles, you may find the premium even higher or your application rejected altogether.
Therefore, we have two pieces of advice for new drivers. Should you just obtained your P License, you can wait for one year to get a full driving license and another two years of experience holding a full driving license so that you will no longer be classified as ‘inexperienced’. If that sounds too much waiting for you, you can add yourself as a named driver to another more experienced driver’s car insurance policy, such as that of a parent.
Do check if your No Claims Discount is transferrable
As its name suggests, No Claims Discount is a discount given to drivers who drive claims- and accident-free for a set period of time. The longer you drive safely, the more NCDs you can enjoy (up to 60%).
Most insurers in Hong Kong allow their policyholders to transfer your NCD when you switch to another company. That’s why insurers will usually ask if you have an existing NCD before they can give you a price quotation. That said, not all insurers will accept existing NCDs so it is crucial that you check with your prospective insurer in advance, as it may have a major impact on your premium.
Do check what kind of coverage you need
There are mainly three types of motor insurance in Hong Kong, namely third-party insurance, comprehensive insurance, and third party fire and theft car insurance (TFPT). Identify your insurance needs in advance to find the plan that best matches your true needs. For example, if you often park your car in outdoor areas and fear for it getting stolen but also want lower premiums, TFPT is a solid option, since it safeguards your car against fire and theft, and is cheaper than comprehensive auto insurance.
Don’t lie about your occupation
Your occupation plays a role in determining your premiums. If you are working as a driver for a celebrity, for instance, it means that you will use the vehicle more frequently and thus lead to a higher risk of accident and a higher premium. Having said that, we still suggest that you should be frank with your insurer. After all, your position may be in actuality different from the definition of the insurer and is linked with a lower premium. In contrast, if you lie about your job and are involved in a traffic accident, the insurer has the right to reduce your compensation or even reject your claim entirely.
More motor insurance tips and info
The above are just some of the things you should be mindful of when choosing a suitable motor insurance plan. As said before, if you are not sure how to opt for the most ideal one, it’s a smart move to engage the service of a reliable motor insurance specialist such as Kwiksure. With over 19 years of solid experience, our team of advisors will work with you to assess your needs and budget and cherry pick the best insurance policy. Contact us today for impartial insurance advice, an obligation-free quote, and a free plan comparison!