n recent articles Kwiksure has taken a close look at some interesting issues that have cropped up in the motor insurance industry including the borderline fraudulent treatment of the betterment clause and five common complaints our clients have had with the car insurance claims in the city.
To recap, the five most common complaints are:
To learn more about these complaints and what has led to them, please read our article here. In fact, it would be a good idea to quickly scan over this article now, as it covers some important changes that Kwiksure would like to see made to the claims process in order to make it not only fair for customers, but also more efficient for both the police and the insurance companies.
At Claims Conference Asia - Hong Kong earlier this year, Neil Raymond, MD at Kwiksure, actually took to the stage and presented to the delegates Kwiksure's suggestions as to the changes that can be made to the claims process in Hong Kong.
As we posted in a previous article, the way many insurers treat betterment in Hong Kong is more or less institutionalised fraud largely due to the fact that it has become common practice for insurers to state that repairs to vehicles that merely restore the car to its pre-crash value are in fact improvements. This means the insurance company then doesn't have to pay the full repair amount, leaving the claimant to cover the repair costs - even when they were not at fault. To make matters worse, some companies in Hong Kong then delay payment or try to haggle with the insured in hopes of being able to settle for an even lower amount.
Obviously, this is not fair for the claimant who was not at fault, as they are left not only having to pay a repair cost, but also with a car that has a decreased value. So, what can be done? Well, when it comes to fraudulent practices, the best thing to do is to completely remove it, or at the very least change and clarify the fundamental practice so that it is easily understood by those purchasing insurance and fair. This is exactly what countries like Canada and the UK - both of which have fairly similar motor insurance claims systems as Hong Kong - have done.
In the past, UK motor insurers actually applied betterment in a way that enabled them not to pay the full cost of repairs, but a number of years ago the practice was removed. Now, car insurers pay for the vehicle to be repaired with parts (often times new) that are discounted or depreciated to equal the pre-crash value of those they replace. Payments are also prompt and of the determined amount. Of course, to keep things fair - so that neither party profits - according to Monetos, " If your car is repaired to a higher standard than it was before the accident, you will have to pay for that part of the repair."
If insurance companies here in Hong Kong were to follow precedents such as the one above, the claims process would become not only more fair, but also more transparent. You won't have to wonder if the provider you are considering will try to cheat you should you be in an accident that isn't your fault.
To be clear, we aren't saying move 100% away from court decisions, rather that it is inefficient for claims cases to go to court for judgment when it is clear which party was at fault - either through admission or police evidence. This is just a waste of resources that can be easily avoided.
In order for this to happen, and Kwiksure believes this is possible, a separate system would need to be set up by the insurance companies and the police. This system would basically see the companies involved in the claim communicating with one another - using information from the police - to settle cases where there is a clear party at fault. By enacting a system like this the claims process should go not only quicker, but will require fewer resources and time from all parties If this change was implemented, in the long run you should see a more profitable motor insurance industry, which could mean lower premiums, or at the very least lower yearly increases.
By securing an agreement or commitment from motor insurers to pay on time and in full, Kwiksure predicts that many of the current complaints will be alleviated with the overall system becoming more efficient.
The biggest benefit, aside from those listed under each suggestion above is that, if enacted, police, and some insurance companies, should stop encouraging parties to settle outside of court. Currently, if you settle outside of court you could be putting yourself at risk of future litigation, as there will be no official record of what happened with the insurance companies. Meaning that if you are in an accident, but choose to settle outside of court, then are sued by the other party at a later date for say bodily injury, your insurance company won't have any record of the accident and therefore will not cover any costs.
While Kwiksure will continue to push to get these changes made to the car insurance claims system in Hong Kong, we realize that it will be a long time before they are actually put in place. So, if you are looking for car insurance, or looking to renew an existing plan, we strongly recommend contacting us. We work with reputable insurers in the city, some of whom have actually done away with the betterment clause and do strive to pay claims on time. At the very least you can be rest assured that you will be treated fairly. Contact our experts today to learn more.
Kwiksure has over 20 years of experience in the car insurance industry, comparing quotes from over 60 insurers in Hong Kong. Use our online quotation tool now to get a free car insurance quote!
The above information is for reference only. Kwiksure takes no responsibility for the accuracy and timeliness of the information. For the coverage, mode of compensation, benefit limit and premium levels of any specific insurance plan, please refer to the relevant policy terms.
Kwiksure is a licensed motor insurance brokerage company with over 20 years of experience in insurance. The company strives to simplify insurance and select the best insurance plans for customers that fit their budget and coverage needs.
Kwiksure provides a range of insurance products, including car insurance, motorcycle insurance, cross-border insurance between Hong Kong and Mainland China, home insurance, travel insurance, domestic helper insurance, and voluntary medical insurance. The team has been named "Best Car Insurance Broker" and "Outstanding Leadership Award" by various media outlets over the years.
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