My vehicle was stolen and in an accident - Will my car insurance pay out?

Car insurance theft article

Two weeks ago, a man was arrested for stealing a pink Toyota iQ car and subsequently hitting six pedestrians, a minibus, and a double decker bus at an intersection in Yau Ma Tei. Following a number of news stories on this “1CE BABY” hit-and-run incident (the allegedly stolen vehicle’s license plate number is 1CE BABY), many drivers in Hong Kong started to question what would happen if their vehicle was stolen and then involved in an accident. Key among these questions is how car insurance companies would handle claims for car accidents involving stolen vehicles.

To help clear up some of the confusion surrounding this issue, today’s blog post looks at everything you need to know about car insurance coverage and accidents involving a stolen vehicle.

Know this about your certificate of insurance

No matter what type of Hong Kong car insurance policy you have, at the time when you purchased your auto insurance policy you will have received a certificate of insurance. The primary existence of an insurance certificate is to verify that you are eligible to insurance coverage under a specific set of conditions.

Among these conditions, you will find a heading labelled “persons or classes of persons entitled to drive”. This specifies the categories of people who are allowed to drive the insured’s vehicle (i.e. the insured, and those the insured has chosen to lend their vehicle to). Anyone falling outside of these categories (e.g. a car thief) are deemed by the insurer as unauthorized to drive your vehicle.

So, what does this mean for claims involving stolen vehicles and a subsequent car accident? As all car accident claims are subject to conditions that need to be met, which in this case would be the condition that the driver must be an “authorized” person, car insurance policies will not pay out for any car accident damages and losses incurred from someone stealing your car and subsequently crashing it.

Learn what your car insurance will pay for

While your car insurance won’t cover the costs incurred from accidents caused by a thief stealing your vehicle and subsequently crashing it, certain types of policies will cover car theft. These include:

  • Third party fire & theft car insurance (TPFT): In addition to third party only insurance coverage, TPFT policies also cover losses caused by fire, as well as the theft of your car.
  • Comprehensive car insurance: This policy offers the most extensive cover, including everything that TPFT policies cover, as well as damages to the insured’s own vehicle (something that third party policies do not cover). Despite offering a wider range of coverage benefits, comprehensive car insurance plans in Hong Kong often cost less than TPFT plans. Find out why by reading our article on the topic here.

How do TPFT and comprehensive car insurance policies handle car theft claims?

Imagine this scenario: it’s late at night, you just finished dinner with friends, and you’re walking back to your parking spot. As you’re getting closer to your car - or rather where your car should be - it is nowhere to be seen! What should you do?

As soon as you’ve noticed that your vehicle has gone missing, you should immediately inform the police, who will ask you to provide a number of details (e.g. your license plate number and the location where you last saw your vehicle).

You will then need to call your insurer and let them know that your car has been stolen. They will assess the situation (the amount of time this will take will depend on the situation and the insurer). If they have deemed that your car has indeed been stolen, they will reimburse you for the market value of your vehicle, provided that you have a TPFT or comprehensive policy. Please note here that after you have already received compensation for your loss, if the stolen vehicle is then found at a later date, you are no longer eligible to take it back (as the insurance company has already provided compensation for your loss).

Who’s liable?

In the event that your vehicle was deemed stolen and then becomes involved in an accident, as you are not at fault you are not legally responsible for any costs related to property damage or personal injury/ death caused by the accident. It is, however, your responsibility to inform the police straight away if you suspect that your car has been stolen. This will reduce the likelihood of any potential legal issues arising from not reporting the loss of your car (e.g. the police suspecting that you might be involved in the accident).

So, who’s legally liable for the costs incurred from such an incident? Using the “1CE BABY” hit-and-run incident as an example, if the man suspected of stealing the Toyota iQ were to be proven guilty, he would then be liable for the costs of repairing/ replacing the vehicles he crashed into during the accident.

The six pedestrians injured in the hit-and-run accident would then also be entitled to request that he pays them back for their hospitalization costs. If he were unable to meet his obligations, the Motor Insurer’s Bureau of Hong Kong would then settle the case. Please note here that they will only provide compensation in circumstances of bodily injury or death, and not property damage (e.g. damages to vehicles, government property, shops). Policyholders of the vehicles damaged in the accident would then need to either make a claim against their own car insurance policy (if their policy covers damages to the insured’s own vehicle), or pay the repair/replacement costs out of pocket.

Final advice: Keep your car safe

While car theft cases are rare in Hong Kong, crime statistics tell us that it does happen. Therefore it’s important that you always park your car in a secure, attended lot with security cameras, as this can reduce the chances of your car being stolen or broken into. For better protection, we also advise securing comprehensive car insurance, as it not only covers liabilities to third parties, but also covers car theft, and damages to your own vehicle (provided that it is not stolen).

If you have any more questions about car accidents and its implications on your car insurance policy, contact our friendly team of experts at Kwiksure today!

Note: The information and advice provided in this article are intended for informational purposes only, and do not constitute or replace legal advice/opinion.

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