The Ultimate Guide to Handing Car Crashes in Hong Kong 2024 (With Settlement Agreement Template)

With so many easily agitated drivers and narrow lanes, it’s little wonder road accidents happen quite often in Hong Kong. Every driver, experienced or not, should learn how to handle an accident as part of their training. If you don’t want to be hastily looking up information right when you need it, you should learn how to respond to a road accident now. Otherwise, if you take the wrong steps, not only can your motor insurer reject your claim application, you could even end up in legal hot water!

There are a myriad of different opinions on what are the proper steps for handling a road accident. Different drivers will give different answers to questions such as "Can the parties simply settle the matter themselves?", "Do I have to notify my insurer within 24 hours?", or "Will I be denied compensation if I said sorry?". Today, the experts at Kwiksure will explain the right steps to take after a road accident, and point out some of the most common fallacies.

3 crucial steps in handling a road accident

Statistics from the Transport Department (TD) revealed that there are about 16,000-17,000 road accidents in Hong Kong every year, of which about 14,000 are minor accidents. The main causes of accidents include careless driving, loss of control of the vehicle, following too closely, careless lane changes, etc.

Road accidents can be divided into three categories: "where you hit other vehicles/people", "where you get hit by other vehicles," and "where you hit an object.” However, no matter what situation you find yourself in and whether the accident is serious or not, the first step in handling it is the same:

Step 1: Stay calm

Although it’s common sense, many drivers forget this after a crash, and instead get taken over by panic or anger, thereby making wrong decisions or making the situation worse.

Step 2: See if anyone is injured

In addition to yourself, you should check whether your passengers are injured. It is worth noting that many people do not experience physical trauma or sequelae until a few days after an accident, so drivers are advised to be cautious and report injuries even if they experience only minor discomfort such as dizziness. If anyone is injured, the police must be called immediately. Don't decide against calling the police to avoid trouble, because even a slight discomfort could get worse in a short time.

Step 3: Stop the car and get off when it is safe to do so

You must not move your car after an accident, because under road regulations, unless the situation is dangerous, you (or anyone else for that matter) should not move or interfere with a vehicle involved in an accident without the permission of the police officer. Instead, stop the car, turn off the engine, engage the hand brake, and get out of the car and go to a safe location after checking traffic conditions, or stay in your car and wait to be rescued.

Should the accident be settled by the parties or should it be reported to the insurer?

If someone is injured, an animal is injured or killed, or serious property damage has been caused, you should call the police provided it is safe to do so, and then file a claim with your insurer. Since the compensation amounts can be huge, the accident should never be settled by the parties themselves in these situations.

On the other hand, if it is a minor accident (such as just a few scratches on the car body) and no one is injured, the drivers can decide to either settle the matter between themselves or claim compensation from the insurer. However, whatever route the drivers choose, Kwiksure advises that the police be called first. The reason is that, though under current Hong Kong law the driver can elect not to call the police if there are no casualties, by calling the police a case report number will be issued. This will afford additional protection to both parties and a recourse will be readily available should one party try to renege on any agreement reached, and some insurers will also want customers to file a record with the police to prove the authenticity of their claim.

1.1 The pros and cons of a settlement by the parties themselves (private settlement)

Before detailing the steps of a private settlement, let's first analyze its risks and benefits.

At first sight, a private settlement is the best way to settle a minor road accident, but there’s a caveat: you will take a huge risk of the other party reneging on the agreement. That is because once a matter is settled this way, you’ll have given up the right to claim compensation from your insurer! If the other party later comes back with a claim (for example, he/she suddenly develops some after-effects and claims an astronomical amount in compensation from you for personal injury), your insurer will have the right to refuse your claim application. Therefore, we recommend that after a road accident, you report it to the police immediately, because in our view the only truly safe way to handle a road accident is to wait for the police to arrive to investigate and record the accident.

Of course, if it is only a minor accident, with only very slight damage to the property of the government or a third party (such as a minor collision or scratch on the vehicle), a private settlement is indeed a simple, effective and attractive solution. One benefit of private settlements is that the other party’s (or your) insurer will not need to intervene. Many car insurance plans specify a deductible, usually ranging from HKD $2,000-$15,000, which is the amount that the policyholder needs to pay before he/she can claim compensation from his/her insurer. As a result, a private settlement can indeed save you money and avoid the lengthy process of claims recovery that could follow, if the claim amount is below the deductible. Furthermore, your insurance premium will not increase, nor will your no claims discount (NCD/NCB) be affected for the coming year.

1.2 Things to remember in a private settlement

No matter who caused the crash, you should try to stay calm and agree on a settlement amount with the other party.

The most important thing is to ask the other party to sign a legally binding traffic accident settlement agreement, stating that they are willing to give up all rights to claim compensation for the accident, listing information including the time, persons present, and location. It must be clearly stated that the responsibility for the accident has been "fully and officially" discharged. See below for a template of a traffic accident settlement agreement.

You are also advised to take photos and videos to record the condition of the car after the crash, so as to prevent others from exaggerating the extent of damage in the future.

1.3 Traffic accident settlement agreement template (DOC version for download) (PDF version for download)

It is recommended that you keep several copies of the traffic accident settlement agreement in your car, because the best time to settle is right after the accident at the scene of the crash, situations may be different if you wait a few days before raising a settlement.

1.4 How do I assess the repair costs when negotiating a private settlement?

If you are not familiar with the market rates of car repairs or have doubts, we recommend that you don’t choose to settle privately, but call the police immediately. The police will make a record of the accident. You can negotiate the cost of repairs with the other party later on, after you have a quotation from a repair shop. The private settlement can continue if the other party accepts the cost; otherwise, you can file a case with the police for investigation and file a civil claim against the other party for damages through normal channels.

2.1 What should I pay attention to when reporting a car accident to the police/my insurer?

If 1) the two parties in the car accident cannot reach an agreement, 2) there are human or animal casualties, or 3) large insurance claims (more than HKD $15,000) are involved, the police will need to investigate as an independent third party to determine which party is responsible for the accident.

The party wishing to claim compensation will be the first to request the police to start a formal investigation. After the police arrive at the scene, they will record the contact information of both parties (including their name, contact number and address, license plate, driving license number, insurance company and policy number, etc.) and conduct an on-site evidence search among other things. Both drivers will get their own report number. At the same time, you should formally report to your insurer in paper or by electronic form within 24-48 hours of the accident (depending on the time limit set by the insurance policy) (Note: notifications via telephone, whatsapp or email, etc., will not be considered a valid report to your insurer). Within one month of the accident, the police will ask you to give a statement at a police station. You can call to schedule an appointment with your report number. The parties will make statements separately, and will not have an opportunity to meet.

It will normally take the police 3 months to 1 year to complete an investigation, after which usually one party will be charged. Unless someone has committed a serious violation of the traffic rules, generally only relatively minor charges such as "careless driving" will be pressed. The police will prosecute the people involved based on the circumstances of the accident, and issue a "Notice of Intention to Prosecute" to all persons on whom charges will be pressed. A driver who receives the notice will have to appear in court after a summons is issued by the court, which will determine who is to be held responsible for the accident.

During this time, all papers related to the accident including the police statement, the results of the police investigation, and a court summons, must be given to the insurance company. Before you appear in court, your insurer will notify you by letter whether they will appoint a legal representative to accompany you. If they do, that would mean that they will arrange everything for you, otherwise your insurer will not object whether to plead guilty or not.

After the court has issued a formal judgment letter stating that one party is responsible for the accident, the aggrieved party can contact the liable party to request compensation, and let them contact their insurer to handle it. Generally speaking, it may take anywhere from 6 months to two years from the day of the accident for the court to make a judgment. However, the claims process could be affected if no one is found liable for the accident.

Your NCD will usually be temporarily deducted if you need to renew your motor policy during the claims process. However, when the other party's insurer has resolved the dispute over accident liability, your NCD will be restored and the overpaid premiums will be refunded to you.

2.2 What insurance plans may cover traffic accidents?

Car insurance

Under Hong Kong law, all vehicles on the road must be covered by auto insurance, and auto insurance plans are either "third party" or "comprehensive". Third-party policies compensate third parties for property damage and personal injury in an accident, but do not cover the vehicle of the policyholder. Comprehensive policies, on the other hand, cover the car of the policyholder as well as third parties.

Personal accident insurance

Normally in a road accident caused by another driver, you can claim reimbursement for your medical expenses from the other driver and his/her motor insurer.

However, you will not be able to claim compensation from third party car insurance if the accident was caused by you, or you hit something while driving, or the other party hit and ran.

Since your car insurance policy will not compensate you for your personal injury or death, personal accident insurance will become crucially important in situations like these.

To make a personal accident insurance claim, you must provide accident-related information to your insurer, including the license plate numbers involved, how the accident happened, location of the accident, information of witnesses and injured persons, copies of your HKID card and driving license, information of passengers, copies of vehicle registration documents, and relevant photos, etc. If the police had been called, you must also provide a copy of the police statement, the case number assigned by the police, your "breath test report" and any "Notice of Intention to Prosecute".

Voluntary Health Insurance (VHI)

If you are unfortunately injured in a traffic accident, your VHI can also help you. VHI plans are divided into standard plans and flexible plans.

3. What if you hit some public property in a crash?

Just like when private property is damaged, when public property is damaged, compensation will be necessary. As always, you should stay calm, decide whether to call the police when it is safe to do so, and report to your insurer within 24 - 48 hours of the accident.

Government property compensation table

Crash/traffic accident Q&A

Q: If I apologize to the other driver after an accident, will it affect my claim?

A: Some drivers will apologize to the other party out of panic after a crash, but in fact, unless you are absolutely sure that you are the party at fault, you should refrain from saying "sorry" or anything similar to the other party. This is because it may cause other drivers or the police to think that you have admitted responsibility for the accident, so it is best to leave it to the police to investigate and decide who is responsible.

Q: What should I do if my car breaks down on a highway/tunnel?

A: If your car breaks down on a highway, you should turn on the hazard warning lights immediately, and do your best to drive your car to the shoulder of the road. If your vehicle’s engine stalls in a tunnel, you must immediately turn off the engine, turn on the hazard warning lights, fasten your seat belt and stay in your car. For details, please refer to the Driver's Guide: What should you do when your car breaks down on a highway or in a tunnel? How to ask for towing.

Q: How to decide who is responsible in a multiple-vehicle collision?

A: There are two types of multiple-vehicle collisions: “rear-end collision” and “being jolted forward”. However, it is recommended that you call the police and let them decide who is responsible. For details, please refer to How does insurance compensation work in a multiple-vehicle collision?.

*** Disclaimer: The information contained in this article does not constitute advice for handling traffic accidents under any circumstances. The information contained in this article is intended to explain the traffic accidents and claims that often occur in Hong Kong, and does not involve any views, responsibilities and handling methods of Kwiksure or Pacific Prime Insurance Brokers.