Know this before buying a motorcycle insurance

In many parts of Asia, the motorcycle is the single most popular vehicle. Here in Hong Kong, these vehicles are quite popular, especially with delivery services and younger drivers who want to eschew the cost associated with purchasing and maintaining a car. While motorbikes are not as popular here as in other countries in Asia, statistics show that they are becoming more so. According to the Transport Department, there were 68,368 motorcycles registered in the city in 2015, up from 55,286 in 2011.   

With an expanding number of motorcycle retailers in the city and the increasing challenge of finding a parking spot for a full-size car, it’s a safe bet that they will be increasingly more common on the city’s roads. Regardless of whether you're thinking of getting a scooter, cruiser, or sport bike you are going to need to secure motorcycle insurance before you can hit the roads.

If you are considering purchasing a new bike, there are a few things you need to be aware of when it comes to insurance.

1. There are limitations associated with third party coverage

Like cars and trucks, it is mandatory to secure at least third party liability coverage for your motorcycle in Hong Kong. Regardless of which insurer you purchase your coverage with, third party insurance will have two main coverage elements: third party injury and third party property damage.

When it comes to the coverage of third party bodily injury, this limit has been set at HKD 100,000,000. This is the same for all types of third party coverage including cars, trucks, and motorcycles.

The thing to be aware of here is the coverage limit for third party property damage. For most vehicles this is usually HKD 2,000,000. For motorcycles, however, some insurers have taken the stance that the property damage caused by a motorcycle is usually less than other vehicles like a car or truck. This means that the coverage limit can be lower, often HKD 1,000,000 or less.

This means that if you are in an accident where damage to a third party property occurs, your plan will cover less. Should the damage be over the limit, you will be paying the remainder out of pocket. Therefore, it would be a good idea to know the limits of your plan. Luckily, there are providers out there who will apply higher property claims limits, so it could pay to shop around.

2. Know how insurers treat probationary drivers

In Hong Kong, once you pass your written and road test you will need to apply for a probationary driver's license. For motorcycles, this means you will need to drive infraction free for 12 months before you will be issued a full driver's license. With this type of license, there are a number of limitations that need to be followed during the probation period.

When you receive your probationary driver's license you are eligible to apply for insurance for your motorcycle. While most insurers will allow you to apply for coverage, some insurers may apply an increased premium for the first year as you are an inexperienced driver, and therefore more likely to be in an accident and submit a claim.

While you will be able to secure motorcycle insurance with a probationary driver's license, there is one restriction that could have a major impact on any claims submitted if breached: You are not allowed to have passengers on your motorcycle.

With a full driver's license many insurance plans will cover passengers on a motorcycle. So, if you are in an accident and your passenger is hurt, they will be covered. If you have a probationary driver's license, however, they will not be covered under any circumstances.

Should you have this license, get in an accident, and have a passenger who is injured, you could be held personally liable for any claims. If this happens, you will not only have to pay out-of-pocket, but your premiums will increase drastically as well. Some insurers may even refuse to provide you with coverage.  

3. Comprehensive insurance that covers theft may be hard to secure

According to statistics from the HKPD, the theft rate of vehicles in the city has remained largely stable for the past few years, with 577 vehicles being reported as stolen in 2015, compared to 626 in 2012. While this number is certainly lower than in the early 2000s, motorcycles are still an easy target for thieves, especially those parked on the street or locations that are not secure.

Because of this and a historically high number of motorcycle thefts, many insurers in Hong Kong are hesitant to offer comprehensive coverage to motorcycles. This is especially true for coverage that also includes theft coverage.

That's not to say it's not available. There are insurers who offer comprehensive coverage including theft coverage for motorcycles, but they may not offer it to vehicles with a lower value. For example, it can be hard to find comprehensive coverage that also covers theft for scooters. If you have a race bike, or a more valuable bike, you should be able to find coverage but it may be considerably more expensive.

Before you purchase your motorcycle, we strongly suggest contacting the motorcycle insurance experts at Kwiksure. Our experts can help identify the best insurance on the market that not only meets your coverage needs, but also your budget. Contact us for a quote today.