How chronic illnesses affect your car insurance claims

How chronic illnesses affect your car insurance claims

Just last week, a serious deadly crash took place in Hong Kong where a shuttle bus smashed into the back of a stationary taxi on a highway, injuring 32 people and killing six, including the drivers of both vehicles. It was the city’s second such road accident in 2018, following a tragic bus crash in Tai Po in February that claimed 19 lives.

The police stated that the coach driver had already worked for 10 hours when the accident occurred, and would investigate whether he could have been overworked or tired. This begs the question of how the physical condition of drivers will affect motor insurance claims. In today’s Kwiksure article, we shed light on the impact of chronic illnesses on motor insurance claims and premiums in Hong Kong.

Will the insurer reject my claims if I suffer from a chronic disease?

Motor insurance provides ‘all-risks’ coverage, which means it automatically covers any risk that the contract does not explicitly omit. As most motor insurance policies in Hong Kong do not exclude chronic diseases, theoretically you may say drivers suffering from such conditions should be covered.

Nonetheless, policyholders are obliged to declare any chronic conditions they are suffering when they file an application form with an insurer, and if they fail to do so, the insurer has the right to reject claims altogether, pay only a part of the reimbursement, or even cancel a policy outright. This is because the insurer may see it as fraud to hide crucial information or misrepresent facts that are integral to the underwriting of your plan.

For example, if a driver suffers from narcolepsy and plows into a car after suddenly falling asleep at the wheel, and they have omitted mentioning the condition on their insurance application form, the insurance company may be willing to pay only half of the original compensation.

Aside from failing to declare relevant medical conditions, other driver behaviors that may lead to less or even no compensation from the insurer include:

Driving under the influence of drugs or/and alcohol

Drink or drug driving is not only against the law, but may also invalidate your insurance policy. 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.

Modifying your car without notifying your insurer

Car modifications may affect the performance or value of your vehicle, so failing to report modifications means that you are at risk of breaching your policy.

Usually, the certificate of insurance will specify the scope of coverage of the insurance policy, and any violation of the conditions/limitations listed in this part of the policy is very likely to void it. Common conditions beyond the scope of coverage include:

  • Driving without a valid driving license

  • Driving without the consent of the policyholder

  • Driving for hire or reward

  • Driving for the purpose of racing or speed testing

For more information about what may lead to your car insurance policy being invalidated, you may refer to our previous feature here.

Will chronic diseases lead to an increase in my premium?

The answer to the above heading is, “Possibly”, but only if the condition is so serious that it may affect your ability to drive, such as acute heart disease. Otherwise, insurers are not likely to adjust your premium purely due to the presence of a chronic disease. However, the following factors may indeed affect your premium.

Young/P-license driver

If you’re under the age of 25 in Hong Kong or a P-license driver, you’ll be generally viewed as an inexperienced driver, and therefore be subject to either higher insurance premiums or higher deductibles if you have to make a claim. This is because inexperienced drivers are statistically more likely to be involved in a collision or commit traffic violations. There is a higher possibility of insurers having to pay for claims for young or inexperienced drivers, and thus they balance this risk by incurring a higher premium. Click here for what new drivers should consider when securing insurance in Hong Kong.

Having a poor driving record

If you have a poor driving record (i.e. a history of accidents and/or a high number of offense points), your premium may be higher than those with a clean record. However, insurers usually increase your premium only when you have acquired a specific number of demerit points (usually six). This previous Kwiksure feature spells out traffic tickets that may raise your premiums.

For additional info on how to reduce your car insurance costs in the upcoming policy term, you can read our feature on the subject here.

Final advice

In a nutshell, most chronic illnesses will not lead to premium increases or invalidation of insurance policies, as long as they are declared properly in the insurance policy application form. Having said that, a number of other factors may cause a driver’s claim to be rejected and/or premium to increase. If you are unsure of the scope of coverage in your policy term, you can read through the policy terms and conditions thoroughly by yourself, or use the free advice of a professional insurance brokerage like Kwiksure.

With over 18 years of experience in Hong Kong, Kwiksure is the leading motor insurance brokerage in the city. Our team of specialists are well-versed in the insurance products from different companies and are on hand to help you out. Contact us today for an obligation-free quote and/or a plan comparison!


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