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Late notification of traffic accident

While driving his car last year, Mr. Wong was involved in a road traffic accident. As the third party car owner did not ask for compensation, and only some paint on Mr. Wong's car was scratched, he did not report the accident to his insurance company as his own car damage was not covered by his motor third party liability insurance.

However, Mr. Wong eventually received a third party property claim one year later. Mr. Wong then reported the claim to his insurance company, but his claim was rejected. Why did Mr. Wong's insurance company reject his claim?

Most motor insurance policies in the market have a provision stating that the insured has to give written notice with full particulars to their insurance company immediately after an accident. As Mr. Wong did not inform his insurance company right after the accident happened last year, it prejudiced the insurance company's right to collect loss circumstances and evidence for defending claims from a third party. For this reason, insurance companies may reject late-reported claims. 

In Hong Kong, it is common for car owners to take out only motor third party liability insurance, especially for second-hand cars. Knowing that their insurance will not cover damage to their own cars, car owners may overlook informing their insurance company of minor traffic accidents especially when the third party does not immediately ask for compensation. Customers are advised to inform their insurance company immediately after any road traffic accident, regardless of the seriousness of the accident, to secure better insurance protection.

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