Insurance Policy Details
Your Motor Insurance Policy Explained
The wording of an insurance policy in Hong Kong is not regulated by the government or the insurance authority; as such insurance companies are free to use the language of their choice in the policy documents (the insurance schedule and the certificate of insurance). Most motor vehicle insurance policies will use similar wording. Policies will normally take the form of a list that will outline the specifics of what is covered under the insurance.
A Listed Policy will typically be presented as follows:
- Policy Number: This is the number assigned to your policy by the insurer. This number is important as it will typically be on all correspondence between yourself and the insurance company. A policy number is needed in the event of a claim.
- Period of Insurance: This will outline the timeframe of the policy. Motor Vehicle Insurance policies will typically last for 1 year, after which they must be renewed.
- Date of Issue: This will note exactly when the policy was issued. Please note that the date of issue and the start of the policy may not always be the same.
- Name and Address of the Insured: This will specify the primary driver/owner of the policy as well as their current correspondence address. Any other drivers of the vehicle included in the policy will be named later. It is important that you check the policy and ensure that your name and address are correct.
- The Risk: This section will pertain specifically to the vehicle that is being insured and will include:
Type of Cover: Whether the policy is providing Third Party or Comprehensive coverage.
Registration Mark: This is the vehicle's license plate and will typically consist of two letters and up to four numbers. (e.g. AA1111)
Make/Model: Information as to the manufacturer of the vehicle and its model (e.g. Porsche 911 Carrera).
Body: Is the vehicle a SUV, Coupe, Sedan, Truck, Motorcycle, or Bus?
Year of Manufacture: The year that the vehicle was made (e.g. 2002).
Engine and Chassis Number: The unique numbers assigned to both the engine and chassis of the vehicle. These can be helpful in tracking the vehicle in the event of theft.
Seating Capacity: Typically, the number of people who can fit in/on the vehicle excluding the driver.
Engine Capacity: The size of the vehicles engine in CC (e.g. 3596 Cylinder Capacity).
Sum Insured: Applicable only to comprehensive insurance policies, this is the total estimated value of the vehicle in Hong Kong dollars.
NCD: This will state the total amount of No Claims Discount that the policyholder is receiving on the policy as a percentage of the premium. Learn more about NCD.
Occupation of Policyholder: This will state what the policyholder does for a living (e.g. Banker)
Named Driver(s): The individuals listed here are named on the policy, as such, should an accident occur, they will be exempt from the unnamed driver excess/deductible.
- Excess/Deductible: This section will illustrate all the excesses/deductibles that may be applicable to the policy, and the amount of the excess/deductible in question.
- Policy Limit: Typically this is the final section in the policy schedule and will outline all the financial limits of liability for the policy (the amount of coverage that the policy will provide). The policy limits will always be subject to the excesses and may have additional implications outlined in the policy conditions. As an illustration, the policy limit required by law for Third Party Death or Bodily Injury is a minimum of HK$100,000,000.
In addition to the Policy Schedule there will typically be five (5) additional clauses that can be attached, but may not be mentioned in the Schedule of Insurance.
- Recital Clause: This is typically the introduction to the policy and will make reference to the policyholder and the insurance company by name. The Recital clause may not always be referred to by name in the policy and can make mention of the application/proposal form and the declaration as forming the basis of the contract. Again, the Recital Clause may not always appear on your policy, especially if you have renewed.
- Operative Clause : This will outline the circumstances under which the insurance is active. This section is sometimes referred to as the Insuring Clause, but will always be recognizable due to the information that it contains. The Operative Clause will outline the perils of the policy (exactly what is covered under the insurance), and may contain information pertaining to the policy exclusions and any excesses/deductibles applicable to the policy. The Operative Clause will not appear in every policy, especially those that are formatted as a scheduled policy.
- General Exceptions: This section is more commonly known as the Policy Exclusion section, and will outline all the risks that are not covered under the policy.
- Policy Conditions: This is the section that will outline the conditions regulating the policy. The Policy Conditions section will usually take note of claims, arbitration in the event of a dispute, cancellation of the policy, the penalties for under insuring the vehicle (average), common law amendments (such as subrogation and contribution), and premium payment.
- Signature Clause: This is so known as it contains the signatures on behalf of the insurer to confirm the policy.
If you would like to learn more about policy details our experts can explain everything to you, just get in contact today.