【Auto Insurance Renewal】 How to Handle Expiring Coverage | Renewal Considerations｜4 Factors Affecting Premiums

According to Hong Kong law, all vehicles driving on roads must hold valid third-party liability insurance. Violators can be fined up to HKD 10,000 and imprisoned for up to 12 months, and may have their driving license suspended for 12 to 36 months. Therefore, all car owners must successfully renew their insurance before the policy expires to avoid breaking the law by driving uninsured.

Generally, car insurance is valid for one year. Insurance companies usually send renewal notices to policyholders about one month before the policy expires via mail, email, or SMS. Upon receiving the notice, the policyholder should carefully review the contents, such as any changes in premium or coverage, to decide whether to renew or switch to another insurance plan.

If you decide to switch to another insurance company, we also recommend that you keep the renewal notice carefully, as it contains your No Claim Discount (NCD), which will be useful as proof when purchasing insurance in the future.

Additionally, if you are unsure of your policy expiry date or suspect your policy is about to expire but have not received a notice, you should contact your insurance company or broker for inquiry.

If you want to compare coverage and premiums from other insurers, you can do so through brokers, insurance company websites, or third-party comparison platforms. You can also contact the Kwiksure professional team for advice and car insurance quotations.

Kwiksure is one of the largest insurance brokers in Asia, with over 20 years of experience in car insurance. It collaborates with over 60 top insurance companies, offering a wide and flexible range of coverage to select the most favorable plans according to your budget and needs. Whether it is third-party, comprehensive, or complex insurance, Kwiksure’s professional team can provide you with the ideal insurance solution.

If you decide to continue with your existing policy, you only need to renew and pay the premium. If you intend to switch to another insurance plan, you need to prepare the following documents for application:

• Proposal form (for non-online applications)
• Vehicle registration document
• Identity documents (Hong Kong ID card or passport) and driving licenses of the owner and all named drivers
• If the owner is a company, provide the company registration certificate
• Proof of No Claim Discount (NCD) or continuous no-accident years for the vehicle (e.g., previous policy or renewal notice)
• If any traffic accidents occurred in the past 3 years, provide accident reports, statements, court judgments, etc.

1. Claims History and Traffic Violations

Insurance companies update premiums based on your claims history and traffic violations. If you made a claim in the previous insurance year, you may face a premium loading (extra charge) upon renewal. Even without claims, insurers may adjust premiums and terms based on loss ratios and market conditions.

Therefore, before agreeing to renew, inquire with your broker or insurer about changes in premiums and coverage and the reasons behind them. If you had accidents and claims, consider whether renewal premiums are significantly higher than new plans available elsewhere.

2. Additional Coverage and Sum Insured

Policyholders can purchase additional coverage, such as extended protection in Guangdong Province or adding named drivers, which will increase premiums. If you do not need these extras, adjust accordingly during renewal. Also, review whether your current comprehensive coverage can be lowered to save unnecessary premium expenses.

3. Deductibles/Excess

Deductible is the amount the insured must pay out-of-pocket when making a claim. After deducting the deductible, the insurer pays the remaining amount according to the policy coverage and terms. Deductible amounts vary by insurer. You can compare deductible amounts and related terms when renewing.

4. No Claim Discount (NCD)

Car insurance usually has a reward mechanism: if the policyholder makes no claims during the insurance year, they can receive a No Claim Discount (NCD) on renewal. Even if switching insurers, as long as you purchase a new policy within 12 months of your old policy’s expiry or cancellation and provide proof, you can transfer your NCD to the new insurer.

Typical NCD for Private Cars:

NCD increases annually starting from 20% up to a maximum of 60%. If you have a certain NCD but make a claim during the policy period, your next renewal will reduce your NCD by 30% under the “discount reduction mechanism.” You should read your insurer’s NCD terms carefully to ensure you receive the proper discount.

Renewing with the Original Insurer

If you renew with your original insurer, you will generally receive the official policy and certificate within about 4 weeks of the policy effective date.

Switching to a New Insurer

If you switch to another insurer, your broker or insurer will issue a temporary cover note valid for 30 days within a few days after purchase, allowing you to complete vehicle licensing and related procedures. Once all required documents are submitted, the insurer will issue the official policy and certificate within about 4 weeks.