If you do plan on lending your vehicle to other drivers, there are a number of things to consider before doing so in order to ensure that your motor insurance coverage remains intact while they are driving your vehicle. Here are seven:
Look at the driver's license and confirm it is valid
As you likely know, in Hong Kong you are legally required to have a valid driver's license in order to operate a motor vehicle. If you are caught without one you could be arrested and charged. And this rule extends further than you might think.
Recently, Kwiksure had a client who lent their vehicle to a friend without checking that the friend had a valid license. While the friend was driving the vehicle, they were involved in an accident that was not their fault. The result of this was that the driver was charged with driving without a valid license. This, in turn, invalidated the insurance and the driver was charged with also driving without mandatory insurance. But the police did not stop there, they also charged the owner of the vehicle. The owner also saw their insurance policy invalidated meaning they had to pay for repairs out of their pocket.
The moral of the story is that, if you are going to lend your vehicle to a friend or even a family member, it is your duty to ensure that the driver has a valid license. It is not enough to simply ask the person you are lending your car to. You should ask to physically see the license and for proof it is valid. If not, you could be held personally liable for any accidents and even charged by the police.
Be aware that some high-end cars may have insurance limits on them
What we mean here is that insurers tend to have set clauses in their plans for cars of high value, or high power e.g, supercars. These cars usually have a strict limit on the number of drivers that can be attached to a policy and will not allow lending.
If you do lend your supercar to a driver, there is a good chance that they will not be covered should an accident happen. Therefore, it is a good idea to consult with your insurer for options around lending and adding extra drivers to your policy.
Be careful of what the person will be using the vehicle for
There is a common clause included with individual car insurance policies that will exclude coverage if the vehicle is used for commercial purposes. This extends to people you lend your vehicle to as well. If you have this clause in your policy, it would be advisable to check with the person you are lending the vehicle to as to what they will be using it for.
Essentially, if they are going to be using it to support a business e.g., driving for a ride-sharing company or delivering something, then it could be viewed that they are using it for commercial purposes, which means they will likely not have valid coverage if you have an individual plan.
Know what will happen if the vehicle is in an accident
Dealing with accidents, the police, and insurers in Hong Kong is a somewhat complicated and time-consuming process. If you lend the vehicle to someone who is then in an accident, this will add yet another layer of complication to the process.
First, you as the owner of the vehicle are going to have to likely prove that you did, indeed, lend the vehicle. If you can, then the insurer should process the claim without much of a problem. It may take a little longer to investigate the accident, however. Where it gets tricky is if the driver at the time did not have a valid license. As we stated above, if you did not check this then you will be held liable and likely charged.
