Being a car owner is not cheap. After forking out a fortune for a vehicle, you then have to make sure to pay for a car insurance policy to protect your new asset. Like all insurance products, motor coverage plans come with a list of exclusions and clauses designed to protect the insurer from reckless or intentional behaviour that can lead to a claim. At Kwiksure, we spend a lot of time advising you what you should do with your vehicle - but this week we’re explaining what you shouldn’t do if you want to keep your car insurance intact.
Where can I find out the rules for when an insurer can void my coverage?
Your car insurance policy documents contain all of the information you need to know in order to understand what is and isn’t covered, and why you might be denied coverage. Your policy document is an agreement, or contract, of what’s expected by both parties in the insurance relationship. Your insurer agrees to provide coverage to you in the event you need to make a claim, while you also agree to abide by certain terms and conditions that reduce or limit the risk of you being involved in a situation that might lead to a claim.
When you act outside of these expectations, you are considered to be in breach of the policy. The rules can differ from insurer to insurer but generally breaching a policy will come with some serious consequences. The most important of which is the invalidating of your policy. When your car insurance policy is void, it means you’ll no longer be covered for incidents that occur involving your vehicle and will therefore be driving illegally in Hong Kong.
The immediate concern is that you’ll be liable for any third-party damage the occurs. When your insurance is invalidated you can be made directly responsible for meeting the costs of others involved in an accident where you’re the cause. There’s also the added risk of being open to police action for driving without valid insurance. This won’t be a definite end in all circumstances where you’ve breached your policy but it can happen.
What are the top ways I can have my car insurance policy invalidated?
Again, the ways you can invalidate your motor insurance and the way it’s spelled out in your policy documents will vary by insurer. There are some common things that count as a breach of policy across the industry, however. Here are the top five ways to invalidate your car insurance:
Failing to disclose information or misrepresentation
One of the quickest and simplest ways to void your car insurance policy is to hide crucial information or misrepresent facts the are integral to the underwriting of your plan. This can include failing to divulge your intention to use the vehicle to transport heavy objects frequently, lying about secure parking access, or leaving out drivers who might use the vehicle frequently.
Not notifying the insurer of modifications
Despite the fact that modifying your car is a strictly regulated affair in Hong Kong, failing to report any modifications or changes to your vehicle can mean you’re at risk of breaching your policy. The conditions and application of your car insurance can be impacted where modifications affect the performance or value of a vehicle. To be on the safe side, always contact your insurer before making changes to your car.
Beyond that, if you do put aftermarket parts (parts that don't come with the car) in your car and fail to inform your insurer, when you submit a claim to cover damages the insurer will only cover the cost of the original part once it has been depreciated. Most aftermarket parts are considerably more expensive than the parts they replace so you could be facing an even bigger loss.
Drink or drug driving
Driving under the influence of alcohol or drugs is not only against the law, but also a surefire way to have your motor insurance policy voided. Some insurers will make this explicitly clear in the policy document, while others will have a broad statement that includes grounds for invalidating your plan if you act illegally while in control of your vehicle.
Using your personal vehicle as a passenger car for hire
Acting as a taxi/car for hire (e.g., man with a van) without a proper license or appropriate insurance coverage is illegal in Hong Kong. Appropriate insurance coverage does not mean private car insurance. This is, essentially, one of the biggest points of contention for Uber drivers - driving for hire or reward can invalidate your private car insurance policy, putting not just you but your passengers at risk.
Driving without a license
If you have your license suspended/terminated or you allow another party drive your vehicle without a valid license, your insurer has grounds to void your policy. This is fair enough; a suspended, terminated, or unlicensed driver has been deemed unfit to drive safely on the roads. This is also the type of breach that can see you fined and sued by the police for failing to have adequate vehicle insurance, even if you're not the driver.
Find the right car insurance policy to cover your needs
Once you understand how to keep your insurance from being invalidated, the next step you might be looking at is securing coverage for your vehicle. Our industry-leading insurance advisors are some of the best in Hong Kong. Kwiksure is a committed partner to hundreds of thousands of drivers around the country. We’re the first choice of many when it comes to securing car coverage, and protecting one of their most expensive assets.