21 December 2023
Northbound Travel for Hong Kong Vehicles (the scheme) was officially launched in July this year, allowing Hong Kong car owners to travel between Guangdong and Hong Kong via the Hong Kong-Zhuhai-Macao Bridge (HZMB) without obtaining a quota. To complement the scheme, the Insurance Authority (IA) coordinated with Hong Kong insurers to implement the Unilateral Recognition policy (URP) for cross-boundary motor insurance in Guangdong and Hong Kong. Hong Kong private car owners who enter Guangdong under the scheme can procure URP products from Hong Kong insurers with coverage extended to include statutory third-party liability motor insurance for the Mainland, thus dispensing with the need to buy a separate policy from a Mainland insurer and making travel between the two places more convenient.
Implementation of the URP and the Industry support
Since the announcement of the URP, the industry has demonstrated proactive engagement by promptly introducing motor insurance products that adhere to the required specifications. There are now 18 Hong Kong insurers1, which account for 84% of the motor insurance market share, providing URP products.
Insurers have also been looking for ways to improve their application processes, including introduction of e-portals which provide the car owners with greater convenience for policy issuance and renewal. To enhance the competitiveness of URP products, the IA is in a discussion with the Mainland authorities to improve URP products by adding new features and providing extra services to increase their value.
The coverage of URP products in the Mainland is primarily the Mainland Compulsory Traffic Accident Liability Insurance for Motor Vehicles (Compulsory Motor Insurance), which protects against third-party personal injury, death or property loss, with liability cover of a maximum of RMB 200,000 per event, which is the statutory minimum requirement in the Mainland. Compulsory Motor Insurance does not cover personal injury or death of the driver or passengers in the insured vehicle, nor damage to the vehicle itself. It does not cover compensation for third-party liability that exceeds RMB 200,000 either.
As the sum insured and the coverage offered by Compulsory Motor Insurance may not be sufficient, we strongly recommend that car owners purchase selective top-up cover, i.e. Mainland Commercial Insurance for Motor Vehicles (Commercial Motor Insurance), when procuring URP products, to protect the driver and passengers of the insured vehicle2 and share third-party liability compensation exceeding RMB 200,0003.
Choosing the suitable insurance product
There are different levels of sum insured and premium among the various Commercial Motor Insurance products in the market. The liability limits for “Commercial Motor Insurance – driver/passenger liability” coverage range from RMB 10,000 to RMB 200,000 in the market, while the liability limits for “Commercial Motor Insurance – third-party liability” coverage range from RMB 1 million to RMB 10 million.
Similar to procurement of motor insurance in Hong Kong, the premium levels for these products are determined according to several factors, such as the age and model of the vehicle, a no-claim discount, and the driver’s driving experience and record of traffic violations. The IA suggests that car owners should select the product with the most suitable level of sum insured based on their affordability and protection needs, and consider purchasing Commercial Motor Insurance for better protection.
The URP allows northbound travel with a single motor policy, facilitating the self-driving of Hong Kong residents to Guangdong for business, family visits or sight-seeing on a short-term basis to promote the better use of the HZMB and the further development of the Greater Bay Area (GBA).
We look forward to continuing our close collaboration with the insurance industry, Mainland authorities and other stakeholders to contribute to the high-quality and sustainable development of the GBA.
Head of General Business (Acting), Insurance Authority
21 December 2023
1 Their details can be found on the website of the Hong Kong Federation of Insurers.
2 Through the “Commercial Motor Insurance – driver/passenger liability” coverage.
3 Through the “Commercial Motor Insurance – third-party liability” coverage.