When purchasing car insurance, we often focus on the coverage provided by the plan and overlook the exclusions listed in the policy. To get the most suitable coverage for your needs, it's essential to understand under what circumstances the plan will not provide coverage. This Kwiksure article will explain the exclusions in different types of car insurance and highlight important considerations, helping you find the most suitable car insurance plan.

Are There Differences in Exclusions among Different Types of Car Insurance?

Yes, there are differences! Currently, there are two types of car insurance available: Third Party Liability Insurance (TPL) and Comprehensive Motor Insurance. In simple terms, TPL only covers damage to third-party property and personal injury in an accident; and Comprehensive Insurance covers losses incurred by the policyholder due to accidents in addition to third-party coverage.

Each policy may have similar exclusions, but there can also be significant differences. Essentially, if you do not want your vehicle and property to be excluded from coverage, you should purchase Comprehensive Car Insurance.

What Exclusions Should I Pay Attention to?

There are no stringent rules in the industry regarding which situations are definitely not covered. To understand the coverage of an insurance plan, you should carefully read the policy terms. If you have not yet purchased car insurance, finding a reliable insurance broker to help you review the coverage and exclusions can save you a lot of time.

To ensure that a car insurance plan meets your needs, you should pay special attention to the following items:

1. Natural Disasters or "Acts of God"

"Acts of God" refers to any unforeseen or unavoidable natural disasters. In Hong Kong, severe weather during typhoon season often causes various damages, including to vehicles that are being driven or parked. For instance, during a typhoon, low-lying areas may frequently experience vehicle flooding or damage.

If you only have Third Party Liability Insurance, the insurance company typically will not compensate for losses caused by natural disasters; however, if you have Comprehensive Car Insurance, you may be eligible for compensation. To understand the coverage for natural disasters, you should carefully read the policy to see if damages from flooding, fire, lightning, storms, and typhoons are covered.

2. Vandalism and Theft

Similar to natural disasters, whether a car insurance policy includes coverage for vandalism and theft depends on the type of policy. Comprehensive Car Insurance offers much broader coverage, and you may be compensated for damages whether or not you are present when your vehicle is damaged. However, unless you have Third Party Fire and Theft Insurance, basic Third Party Liability Insurance generally does not cover these two items.

It is important to note that after receiving compensation from the insurance company, you will have to forfeit your No Claims Discount (NCD). For minor claims (like a broken side mirror), the final cost may end up being higher than paying out of pocket.

3. Damage Caused by Self-Repairs

Most insurance companies specify service providers that customers can choose from to ensure service quality and cost-effectiveness. Whether it's a designated medical center or vehicle repair center, if a customer incurs more severe damage after using their services, the insurance company can hold the responsible party accountable for compensation.

Therefore, we recommend that you read the policy terms carefully and inquire with your insurance company before deciding to repair your vehicle yourself. Any repairs or actions outside of standard maintenance may lead to a loss of your right to claim or even invalidate your policy.

4. Driving Under the Influence

Driving under the influence, commonly referred to as DUI, is a serious offense. If a driver is convicted of having an alcohol level above the legal limit, it violates the Motor Vehicles Insurance (Third Party Risks) Ordinance, causing Third Party Insurance to become void. Therefore, a DUI driver must bear the costs for injuries and property damage to third parties, and they will also face charges for driving without valid insurance.

Generally, the insurance company will initially handle claims related to third-party bodily injuries. Since the policyholder has violated the insurance terms, they must cover the costs for third-party property damage themselves. In other words, the insurance company will not compensate the policyholder for their own property or bodily injuries.

Additionally, the insurance company will seek to recover the amounts paid for third-party bodily injuries from the policyholder. In summary, if a policyholder is confirmed to have been driving under the influence, they will be responsible for all compensation costs. The insurance company will only handle third-party bodily injury claims without affecting their right to deny coverage and will later recover the relevant amounts from the policyholder.

Frequently Asked Questions

What are the differences in exclusions between TPL and Comprehensive Insurance?

Third Party Liability Insurance (TPL) only covers damage to third-party property and personal injury in an accident. Comprehensive Car Insurance covers both third-party damages and losses incurred by the policyholder due to accidents.

What exclusions should I pay special attention to?

Since there are no strict rules regarding which situations are 100% not covered, when purchasing car insurance, you should particularly check whether the policy covers losses caused by natural disasters, vandalism and theft, and damage from self-repairs, to ensure that the insurance meets your needs.