• car insurance

    When an accident occurs, it can help the driver share the casualties and property losses caused by personal responsibility, as well as vehicle repair and replacement costs.

  • labor insurance

    Under the Employees Ordinance, employers are protected from the risk of compensation for work-related injuries to their employees.

  • Public Liability Insurance​

    Applicable to various public activity places, it protects human lives, casualties, third party property losses and expenses caused by negligence or accidents during production, business operations and other activities in designated places, as well as related legal expenses.

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FAQ

What is deductible?

Car insurance policy deductible (Excess) , commonly known as the deductible.

Excess is the expense that car owners are responsible for when making a car insurance claim from the insurance company when an accident occurs. The deductible will be determined based on the type of claim and the type of driver at the time of the accident.

Various types of excess are detailed as follows:

  • General Excess: Applicable to comprehensive insurance (full coverage) where the insured vehicle is lost or damaged due to an accident. The car owner must pay this excess when making a car insurance claim.
  • Theft Loss Excess: Applicable to comprehensive insurance (full coverage) if the insured vehicle is unfortunately stolen. The car owner must pay this excess when making a car insurance claim.
  • Parking Damage Excess: Applicable to Comprehensive Insurance (Full Coverage) when the insured vehicle is left unattended or is damaged due to an accident while the insured vehicle is parked, and a car insurance claim is made. The vehicle owner must pay this deductible. This deductible is calculated together with your own vehicle and property damage deductible.
  • Third Party Property Damage Excess: Applicable to comprehensive insurance (full insurance) and third party property damage (three insurances).
  • If the insured vehicle causes injury or death to a third party or property damage due to the driver's negligence, the vehicle owner must pay this deductible when making a car insurance claim.
  • Unnamed Driver Excess: Applicable to comprehensive insurance (full coverage) and third-party property damage (three insurances) where the driver of the insured car is not named in the insurance form and must pay this excess. This deductible is calculated in total with the damage to your own vehicle and property or the damage to a third party’s property.

What is depreciation?

Depreciation refers to the decrease in value of a vehicle as its age increases. Some auto parts have an "expected life", so repaired components are worth less than new replacement components. Insurance companies in Hong Kong usually consider depreciation amounts based on these conditions.

The insurance company repairs the vehicle and restores it to the condition it was in before the damage. This practice is acceptable under Hong Kong's legal system. To reflect the improved condition of the car after repairs, the depreciation rate needs to be adjusted accordingly.

For example, car insurance companies in Hong Kong will stipulate through policy clauses that they will not provide coverage for certain self-damage of the insured vehicle:

  • Depreciation, wear and tear, mechanical or electronic equipment failure, failure or damage
  • Tire damage (unless the damage also causes damage to other parts of the vehicle)
  • Any excess applicable to accidents

The amount of depreciation after the vehicle is repaired or any parts replaced will be assessed by a claims adjuster or professionals from a notary firm appointed by the insurance company.

Example of calculating depreciation rate:

For example, if a five-year-old vehicle is partially damaged in a traffic accident, the repairer and the insurance company's claims adjuster agree that the repair amount is $50,000. The depreciation amount is calculated based on 30% of the replacement part price or $15,000. The $15,000 depreciation is assessed based on the vehicle's age (five years), vehicle condition (partial damage) and mileage. Therefore, the amount of the claim is $50,000 (repairs) less $15,000 (depreciation), less any applicable deductible.

What circumstances will affect the vehicle depreciation rate?

The amount of car depreciation is based on the age of the car, its condition before the accident, and the number of miles driven.

There is no fixed method for calculating car depreciation. Many insurance companies calculate vehicle depreciation differently. The following example is one of the common depreciation rates for new vehicles:

· One year after purchase: 20 - 30% of original value deducted

· Two years after purchase: 25-40% of original value deducted

· Three years after purchase: 30-50% of original value deducted

· Four years after purchase: 35 - 60% of original value deducted

· Five years after purchase: 40-70% of original value deducted

· Six years after purchase: 45 - 80% of original value deducted

Car depreciation will slow down six to seven years after purchase, and will maintain 20 - 30% of the original value thereafter. The amount of car depreciation is based on the age of the car, its condition before the accident, and the number of miles driven.

If the vehicle is a "total loss" after an accident and the vehicle is less than one year old, depreciation may not be applicable. Some car insurance policies have a "new-for-old" mechanism, which specifically covers claims for cars that are less than one year old and are completely damaged. However, if the car is only partially damaged, car insurance companies will generally only calculate depreciation based on the age of the car.