The Insurance Claims Process in Hong Kong
With the majority of road accidents in Hong Kong the damage caused to each vehicle involved will typically be less than HK$15,000. You may be able to settle a small claim directly with the other party; however, not involving your insurance company may pose a potential risk. If the other party, at a later date, comes back to claim further damages (possible personal injury claim) and you have not notified your insurance company within the proper time frame then they are entitled to deny the claim.
If you are at fault
It is not unusual for drivers to settle small claims independently of the insurance companies. In this event you may decide to pay for the costs of repairs to your vehicle by yourself. You may also agree to repair the damage to the other driver's vehicle without involving their (or your) insurance company.
This approach is often condoned by the Hong Kong police if the accident is not the result of a driving offence, but they will not explicitly state this.
There is, however, significant risk when using the aforementioned approach to settlement. This pertains to the fact that if the accident was your fault, then the third party may come back demanding additional compensation, typically in relation to a personal injury claim.
If you decide to settle without involving the insurance companies then it is advised that you require the other party to sign a legally binding disclaimer waiving all rights to claim, and that the settlement is 'full and formal'. It is important to note that by settling there is no admission of liability for the accident.
If other party is at fault
If a third party is at fault in a small claims situation then it is typical for drivers to try and achieve a quick cash settlement for repairs to the vehicle.
In this situation you will still need a liability disclaimer from the Third (other) party so they cannot come back to you with a 'counter claim'.
A quick cash settlement, in either situation, can be an effective solution to what has the potential to become a long drawn-out process. One of the benefits of settling a claim without involving the insurance companies is that you are able to protect your No Claims Discount.
A large claim is a situation where damage to the vehicle(s) exceeds HK$15,000. Below we have outlined some of the more typical approaches used in regards to large claims in Hong Kong.
Assignment of fault/blame
In a large claim where there is no disclosure of liability from a third party it will be almost impossible to recover any money from the third party insurer without the police being involved in the situation.
When police attend an accident they will prosecute in 99% of cases. This prosecution is, generally, not serious and will typically not affect your driving license unless a serious road traffic offence has been committed. However, by prosecuting an individual involved in an accident the police have assigned blame and decided who is at fault. Insurance companies in Hong Kong will follow the Police conviction in regards to assigning fault, however if there is no prosecution then it becomes virtually impossible to settle the claim.
For very minor cases the police will normally not want to prosecute. If the damage is small then they may see a prosecution as a waste of time. If you are innocent and the third party involved in the incident will not settle in cash, you should insist that the police prosecute the other driver, which will then normally happen.
Prosecution and reimbursement
A prosecution by the police will normally take up to 3 months to reach a conviction. Once the prosecution is completed the insurance will typically take 3 weeks - 6 months to provide reimbursement, depending on the quality of the other driver's insurance company.
If you have an accident where it is not your fault and the other driver does not settle in cash, then it will normally take between 3 and 9 months for you to receive reimbursement.
If your policy renews during the claims process, then you will normally lose your NCD benefits, but this can be reinstated, along with any overpaid premiums, once the other insurance company has settled the dispute.
The information contained herein should not be construed, in any way, as forming advice on how to proceed in the event of an accident. This page contains information explaining what typically happens in Hong Kong with regards to accidents/claims and does not, in any way, reflect the views, mission, and practices of Kwiksure or Pacific Prime Insurance Brokers.