Tesla Car Fire in Hong Kong: Does My Car Insurance Cover Motor Fire?

The last 30 days have witnessed Tesla appear virally in the news globally and on many social media platforms, but for reasons not so appealing.

To the company’s horror, a Tesla car appeared to emit smoke when suddenly it erupted in flames on April 21st in a Shanghai garage. Then, less than two weeks later, the latest incident in a Hong Kong parking lot saw another Tesla car emanate smoke from its front, catching fire soon after and exploding. Fortunately, reports from both incidents had no confirmed casualties. Tesla Inc had sent their investigators right away to gather details but have not commented directly on the cause or type of model. The social media sphere has also released views of their own.

However, they have confirmed that they will be updating the battery systems in the vehicles. The software update aims to better protect the batteries and improve their overall longevity.

Car fires can happen for a number of reasons, causing severe damage to life and property. It is one of the biggest safety concerns that the car industry is forced to acknowledge. We will look at the below scenarios to aid our understanding:

Arson

This is not something you would usually come across, but the reality is that it does happen. Individuals either with intent or at random will target vehicles and set them on fire. This is a criminal act indeed and at the very least vandalism of an inappropriate nature. Should your car be purposefully set on fire, you would have to file a police report, and once it was determined you were not involved in causing the incident, comprehensive coverage may reimburse you for the damages.

Garage Fires

The garage can be deemed the safest place to leave your car, especially when insurers take into account the location of the vehicle for insurance premium calculations. However, even the safest of places pose their risk. A fire from another part of the apartment or home can spread and therefore cause complete damage to vehicles parked in the garage.

Home insurance, in this case, may not cover cars so it is recommended to have comprehensive cover for compensation if your car is parked in your garage and it sustains damage from a fire.

Engine Fires

An engine fire can cause irreversible damage to your car and typically comprehensive coverage may be the most appropriate choice to cover the cost of repairs in the event the engine becomes engulfed in flames while driving on the road. However, it is best to consult your insurer or broker when looking at policies that cover engine fire as there may be various excluded factors when claiming (see below under ‘rejections’).

Electrical Fires

There are incidences of cars catching fire due to electrical or wire short-circuits, or as a result of some wiring defects. For the purpose of claiming, a fire is defined as combustion, in which substances combine chemically with oxygen from the air and typically produce light (flames), heat, and smoke. So for the Tesla incidents, we ourselves can only speculate the cause would have been electrical for it could have been initiated by their batteries. However, we are unable to comment further without official announcements from Tesla. So in this case, cover such as comprehensive motor insurance will cover damages and losses to the insured.

In Hong Kong, there are 3 main tiers of motor insurance that we will discuss briefly.

For owners of Teslas, with reference to the latest fire in Hong Kong, we would suggest referring to comprehensive cover as explained below:

1. Third party cover

This covers third party liabilities only - such as the cost of damage to other cars in a crash. It does not cover your own car in an accident. For situations involving fire, the third party only motor insurance cover is not applicable as it does not cover loss to the insured or third party if a fire arises.

2. Third party fire and theft cover (TPFT)

This cover is a tier above ‘third party’ and covers everything that third party only insurance covers, but it also safeguards the policyholder’s vehicle against losses and damages caused by fire and theft. In these instances, TPFT policies will reimburse you for:

• The theft of your car
• Damages to your car from attempted theft
• Losses caused by car fires (e.g. accidental fire)

3. Comprehensive cover

This is the most complete tier and therefore the most expensive type of cover. If your car is damaged by a fire that was not the result of personal intent, then comprehensive motor insurance coverage may reimburse you for damages.

It is also important to refer to your expert broker who will give you impartial advice on the best comprehensive policies for your vehicle and budget. Please bear in mind that some comprehensive motor insurance policies exclude electrical fires from fire coverage.

For example, if the policy includes reimbursement for electrical fires, the claims adjuster handling your claim will opt to carefully investigate what instigated the fire and decide if the cause of the fire is covered by the terms outlined in the comprehensive policy.

For more information with regards to the above types of cover, we would recommend reading the following articles: Third party vs comprehensive car insurance: What happens when there’s an accident? and Did you know this about third party fire and theft car insurance?

In the event your vehicle catches fire, you should immediately contact your insurer and the police to report the matter. By promptly reporting the situation, you have begun the process to get the insurer to arrange a spot survey. Spot surveys can aid the insured in reaching an easy and early claim settlement. Adjusters may ask for the cause of the fire, which may need further investigation even if the vehicle is totaled (written off).

The police should provide a 'First Information Report' which is a written report detailing the incident. Insurers may ask for this to be submitted with any other documents or reports.

All insurers practice the claims process in a similar fashion, but to plan ahead it is best to speak to your insurer and find out as much information as possible, such as what to do in the event of a car fire.

By getting impartial advice from a broker beforehand whilst deciding on a particular motor insurance policy, you can request for an explanation of what to do if you experience such an unfortunate situation. A complete comparison of different insurance companies can aid your preparation and decision so you can gain the best protection for your vehicle against a fire.

Below are some of the rejections that your insurer may bring up. By asking them beforehand, you will know specifically if you will be covered or not:

Insurers may reject the claim if the vehicle catches fire under the following conditions:

1. Mechanical defects like oil leakage, fuel seepage, high pressure at vulnerable parts, overheating of the engine, and other defects.
2. Sparks from the vehicle’s battery, which may not be able to support fitment of additional accessories.
3. Sparks from a tear in the electric wiring systems.
4. Installation or replacement of LPG gas kits, air conditioners, etc.
5. Short circuits or defects due to tampering of the electrical wiring system to fit extra accessories like woofers, amplifiers, headlamps, fog lamps, alarms, air filters, etc.

We would advise those looking to purchase a car to determine with the manufacturer how to maintain the vehicle in order to reduce the risk of internal fires from happening. In addition, if you are considering modifying your vehicle in any way, shape, or form, you should visit an authorized professional that specializes in what you wish to change. Installing a small fire extinguisher in the vehicle may help in case of an emergency.

Who do I contact if I need motor insurance for my Tesla or a conventional vehicle?

Compare multiple motor insurance quotes to see how much it might cost with different insurers and different variables. You can easily compare motor insurance quotes online here.

Kwiksure remains the best choice for finding and securing adequate car insurance in Hong Kong. Our expert advisors have decades of experience, and they remain completely committed to ensuring our clients have the best possible experience at all times. For a free quote or advice on insurance before and after you buy a car, contact the team at Kwiksure today!