Comprehensive motor insurance for peace of mind

They say when it rains, it pours. Earlier this year, heavy rain caused severe flooding, submerging several cars up to half their height at an outdoor car park in Tseung Kwan O. Many car owners resorted  to calling tow trucks for their vehicles in order to repair them. For car owners, the rainy season always brings extra concerns about vehicles parked outdoors. With extreme weather becoming more frequent, cars can easily suffer damage from flooding or water ingress, or from being hit by heavy objects, such as fallen trees or bricks propelled by strong winds. All these scenarios can and do happen. And during those times, having comprehensive motor insurance provides peace of mind by covering these unfortunate possibilities.

In our previous articles, we discussed the differences and considerations between “Third Party” and “Comprehensive” insurance. Let’s recap some key points. “Third Party” insurance only covers losses caused to third parties by the car owner, and excludes injuries to the driver and damage to the vehicle. On the other hand, “Comprehensive” insurance is a voluntary product that not only includes third-party liability but also covers the car owner, vehicle damage (e.g., windscreen damage), and injuries or property damage caused by accidents or adverse weather conditions, offering more thorough protection.

Last year, during a black rainstorm warning, a car owner parked his electric vehicle in a village in the New Territories. Heavy rainfall caused nearby rivers to burst their banks, completely submerging his car and completely writing it off. Fortunately, this car owner had comprehensive insurance and was able to file a claim with his insurance company. Given the total loss of the car, after a professional assessment and detailed analysis of the case, the insurance company compensated the customer for the market value of his electric vehicle at the time of the incident, helping him resolve what had developed into an urgent crisis. Additionally, the insurance company provided a free service to tow the written-off car from the repair shop to a recycling yard.

No matter how carefully you drive, debris from the road can eventually damage your windscreen, which is a common claim item. Generally, repairing a damaged windscreen at a car workshop might cost anywhere between several hundred and a few thousand Hong Kong dollars, and you would typically handle this on your own. However, some comprehensive insurance products on the market offer a more thoughtful service for car owners. Just call the claims department, and they will refer you to a designated repair centre. All you need is to show your driving licence or vehicle registration documents, and you won't need to pay any repair fees, fill out forms or submit any other documents. The repair centre can even arrange to fix the damage wherever you have parked your vehicle, which is much more convenient that driving it to a repair centre.

Although comprehensive insurance offers all-around protection, policyholders should be aware of the following points. When taking out insurance, most companies will consider several factors to determine the premium you pay, such as the mileage of the car, the named driver’s driving record, any previous traffic violations and the car’s market value. Additionally, the age of the car is a factor that can affect the premium. The older the car, the lower the reliability of its components, increasing the associated risk. So even if the car is over six years old – and although the insurance company may charge an additional fee – the coverage remains unchanged. In the event of extreme weather, if your car is submerged or damaged by flooding, comprehensive insurance will provide you with maximum protection.

Additionally, many insurance companies offer 24-hour roadside emergency repair, a 24-hour free towing service and vehicle support consultation services to reduce customer inconvenience and anxiety.

Hong Kong’s climate is well-known for being humid and rainy, making cars parked outdoors susceptible to wind and rain damage, increasing the risk of malfunction and corrosion. Taking out comprehensive insurance can provide you with full protection, reducing your potential financial loss from accidents, making it a smart decision.

This Chinese version of this article was published in the Hong Kong Economics Journal 

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