Hong Kong EV insurance costs to fall, but third-party liability may remain high

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Insurance premiums are set to fall as EV prices decline, but third-party liability coverage to remain high due to accident rates and repair costs

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Comprehensive motor insurance covers third-party liabilities and medical expenses of the insured in an accident. Photo: Jelly Tse

Eric Ng

Published: 8:30am, 15 Nov 2024

Insurance premiums for electric vehicles (EVs) in Hong Kong will fall as their costs decline, but that may not lower the cost of protection against third-party liability, according to an industry executive.

EV owners on both sides of the border would do well to buy additional coverage beyond the minimum legal requirement in mainland China to bring it on par with Hong Kong, said Eric Hui, CEO of Zurich Insurance in Hong Kong.

“Falling EV prices should generally mean lower premiums for comprehensive coverage, but third-party coverage depends more on the accident rates and severity of the damage,” he said.

Comprehensive motor insurance covers third-party liabilities and medical expenses of the insured in an accident. It also includes repairs, non-collision damage and theft.

Eric Hui, CEO of Zurich Insurance in Hong Kong. Photo: Handout

Under Hong Kong law, it is mandatory for all motor vehicle owners to take out insurance that covers third-party liabilities of at least HK$100 million (US$12.8 million). On the mainland, the statutory requirement is only 200,000 yuan (US$27,745). Owners of older vehicles with low market value tend to only buy third-party coverage.