[P-License Car Insurance] P-License Insurance Guide – Third-Party vs. Comprehensive Coverage & Tips to Reduce Premiums

After overcoming all the hurdles, you've finally earned your P-license (provisional driving license)! Naturally, you’d want to buy or rent a car and celebrate with friends and family. However, before hitting the road, all new drivers must take a crucial step—purchasing car insurance! Many new drivers have questions about car insurance, but don’t worry—Kwiksure is here to guide P-license holders through the essentials of car insurance.

P-License Car Insurance – Third-Party or Comprehensive?

Car insurance is divided into third-party insurance and comprehensive insurance. Third-party insurance covers fewer risks than comprehensive insurance, making it the cheaper option.

• Third-party insurance primarily covers injury or property damage suffered by others (not the policyholder). For example, if you accidentally hit a pedestrian while parking and need to cover their medical expenses, third-party insurance will compensate them. However, it does not cover any damage to your own car.

• Comprehensive insurance, in addition to third-party coverage, also protects your vehicle against damages such as collisions, fires, theft, and vandalism. Some policies even offer extra benefits like 24/7 free towing services. If you purchase comprehensive insurance, you don’t need third-party insurance separately, as it already includes third-party coverage.

According to Hong Kong law, all vehicles on the road must have at least third-party injury and liability insurance to cover damages or injuries caused to others. P-license holders are no exception and must have at least third-party insurance.

How Much Does P-License Car Insurance Cost?

People often say that new drivers find it hard to get insured and face high premiums—is this true? According to Ken, Kwiksure’s automotive insurance manager, most insurance companies are willing to cover drivers aged 21 or above, regardless of their P-license status. However, drivers under 21 or those insuring high-performance sports cars may be denied coverage altogether.

Regarding premiums, P-license holders and drivers under 25 are generally considered less experienced, meaning they must pay higher insurance premiums and higher deductibles when making claims. Statistics show that young or P-license drivers are more prone to accidents and traffic violations, prompting insurers to charge higher premiums to balance the risk. Ken notes that around 25% of P-license policyholders at Kwiksure have made accident claims, which is 15% higher than regular full-license holders.

Because of this, P-license insurance premiums can be 2-3 times more expensive than those for experienced drivers to offset potential compensation costs. Including deductibles, premiums can easily exceed HKD 10,000.

How to Reduce P-License Car Insurance Premiums?

1. Wait Until You Get a Full License

One way to reduce insurance costs is to wait until you have a full license for two years before purchasing car insurance. In other words, if you just obtained your P-license, you would need to wait three years to lower your premium—one year to get your full license and another two years to avoid the "inexperienced driver" surcharge.

During this time, whether you choose to drive or not is up to you. Since neither the insurance company nor the government can easily verify your actual driving experience, even if you barely drive in those three years, insurers will still consider your accumulated driving experience when calculating your premium.

2. Become a Named Driver on an Experienced Driver’s Policy

If you don’t want to wait, you can become a named driver on someone else's policy, such as your parents’. However, policyholders should be aware that adding a P-license driver will increase the premium and deductible. Additionally, if the P-license driver is involved in an accident, the policyholder is responsible for filing claims, bearing liabilities, and may even lose their No Claims Discount (NCD).

Because of this, some new drivers continue using their parents’ car without being listed as named drivers. However, this comes with high risks—if an unnamed, young, and inexperienced driver gets into an accident, the insurer may refuse to compensate or even cancel the policy entirely.

3. Choose a Lower-Value Car

The more powerful the car (e.g., sports cars), the faster it can go, increasing the likelihood of serious accidents. These cars also have higher repair costs, leading to higher insurance premiums. New drivers should consider buying a second-hand car—although it may not be as fast or powerful as a sports car, it comes with cheaper insurance. The most important thing for new drivers is to choose a car that suits their needs and gain experience driving safely on the road.

Related Reading: First-Time Car Buyers’ Guide – Buying Process, Costs & Important Considerations

4. Use an Insurance Broker for Better Deals

Many insurance companies are reluctant to cover new drivers, making it difficult to find suitable insurance on your own. In this case, it's best to use a reputable car insurance broker, such as Kwiksure. We partner with over 60 insurance providers in Hong Kong, allowing us to compare different policies and help clients find the best coverage for their needs—sometimes at better rates than buying directly from insurers!