[Borrowing a car from a friend] Insurance protection for car owners and car borrowers | Things to note when borrowing/renting a car | Instructions for registered drivers who sign up for car insurance

The first thing to remember is that car insurance is with the car, not the driver. In other words, when you borrow a car, you actually lend it out along with the car insurance. If a traffic accident occurs, you must compensate or pay Deductible fee It's all the car owner's responsibility.

If you often lend your car to the same driver, you might consider adding him to your car insurance plan inside. The process of registering the name of a frequent loaner vehicle driver on an existing insurance plan is simple. You can ask your insurance company to assist with the process, which usually takes a few days. Drivers who apply to join the insurance policy need to meet the following conditions:

1. Drivers must have at least two years of experience

Drivers applying to join the policy need to have at least two years of driving experience, or hold a driving license for more than two years.

2. Driver must be 18 or 25 years old

Each insurance company's requirements may vary slightly, but most plans require that drivers who sign up for the policy be at least 25 years old, as drivers at this age are no longer considered young drivers. At the very least, drivers must be at least 18 years old, as this is the minimum legal driving age stipulated in Hong Kong laws. 

3. Drivers must hold a valid driving license

This condition includes two parts: First, the driving license cannot have expired or expire before the end of the policy. The second point is that the driving license must be issued by Hong Kong or other countries recognized by the Transport Department. If the driver who joins the policy holds a license that is not issued by a recognized country, it is very likely that their name will not be included in the policy. 

4. The driver cannot have applied for compensation in the past 5 years

Based on Kuaisheng’s experience, this is a global provision; the driver cannot have made an accident claim within the past 5 years.

It should be noted that the requirements listed above are only general requirements, and each insurance company will usually handle each application independently. For example, if you wish to add a person under the age of 25 but with more than 2 years of driving experience to your existing policy, the insurance company will generally accept the application.

Impact on premiums

Insurance companies usually allow up to four drivers to be added to a policy. There is usually no charge for adding a second driver, but a third driver will pay 10% of the premium and a fourth driver will pay 20% of the premium.

In addition, if the new driver is a young driver under 25 years old and the car is less than two years old, the insurance company will most likely charge an additional 40% in premiums. Some insurance companies may also charge an administrative fee of up to $500.

If you decide to rent your car to relatives or friends for a short period of time, you can pay attention to the following points:

1. The validity period of the borrower’s driving license

Because if the borrower is caught driving without a license, the owner may also be prosecuted.

2. Some expensive cars may have insurance restrictions

More expensive cars have insurance restrictions, such as strictly limiting the number of drivers or not allowing the owner to loan the vehicle out. So if you want to lend your expensive RV to a friend, it's best to ask the insurance company first, or consider adding the borrower to the insurance plan.

3. Purpose of borrowing a car

At no time are vehicles used for commercial purposes (such as carrying passengers for pay) covered by insurance. Therefore, before you borrow a car, it is best to ask the other party for the purpose of borrowing the car.

4. Claim handling in case of accident

Once an accident occurs and the driver involved is not one of the drivers on the policy, the claim will be more complicated. As the car owner, you need to prove that you actually loaned the car. As a rule of thumb, as long as you are willing to provide proof, the insurance company will still be willing to process the claim.

5. Car rental app terms and conditions

If you are borrowing a car from a car rental app instead of asking a friend to borrow it, you should read the terms in the app carefully. Because the car rental app’s insurance will override your insurance, the advantage is that you don’t have to be responsible for any losses if an accident occurs while renting, but the disadvantage is that the wording of the additional policy and the use of the car by the renter will affect you. So before renting a car, remember to read the relevant documents clearly.

6. Truthfully report usage to the insurance company

We recommend that you truthfully report the use of your car to your insurance company. For example, if your two children frequently use your car, then we recommend that you add them to your policy, otherwise the insurance company has the right to cancel your policy if they discover that a frequent driver is not on the policy.

7. Review the car insurance policy terms again

Most car insurance in Hong Kong will provide coverage for rented cars, but some policies will have restrictions or additional terms (such as no commercial use). So before borrowing a car for a short period of time, it’s best to read the terms of your policy clearly.