【Car Full Coverage vs. Third-Party Insurance Comparison】Is buying full coverage worth it? Which company gives the best value for money?

Hong Kong recently experienced a once-in-a-century torrential rain, with urban flooding turning the city into a vast expanse of water; many cars were water-damaged and written off (Total Loss). The law requires vehicle owners to purchase third-party liability insurance (third-party only), but third-party-only insurance does not cover damage to the insured vehicle, so this storm may prompt many owners to consider buying comprehensive car insurance (comprehensive). Comprehensive insurance generally costs about twice as much as third-party-only, deterring many owners, but it offers broader coverage and can compensate for vehicle loss. This time 10Life compares comprehensive and third-party car insurance on the market, identifies affordable comprehensive options, and explores whether comprehensive coverage is worth the cost.

The main difference between comprehensive and third-party-only insurance lies in the scope of coverage: third-party-only only compensates for accidental third-party bodily injury and property damage, whereas comprehensive can cover third parties, the vehicle owner, and the insured vehicle. Table 1 lists the main differences in coverage between the two.

Comprehensive cover not only includes third‑party liability protection, it also covers car repairs, towing, renting a replacement vehicle, and medical expenses for the driver and passengers. Its coverage is broader than third‑party‑only insurance, so premiums are naturally higher.

This time, 10Life obtained quotes from seven insurance companies in the market that offer car insurance, attempting to compare comprehensive and third‑party‑only premiums. The comparison uses a common family car as an example — a 2023 Honda Stepwgn (engine capacity 1,499 c.c.), with a vehicle value of HK$290,000. Assume the insured is 35 years old, employed as an office clerk, has 10 years of driving experience, no claims in the past 3 years, a No Claim Bonus (NCB) of 60%, and no traffic violation record in the past 5 years.

As shown in Table 2, comparing the comprehensive and third-party, fire and theft policies of seven insurers, a company's comprehensive premium is generally more than twice that of the third-party policy. Comprehensive cover is more expensive, but is its protection worth the price? Considering the wide scope of comprehensive coverage, Table 2 extracts and compares the more significant differences in coverage among different comprehensive products.

If the policyholder has not made an accidental claim in the past year, the insurer will grant a premium discount or reward at the next renewal, known as the No-Claim Bonus (NCB/NCD). Therefore, many car owners choose to settle privately (commonly known as a private settlement) after an accident in order to avoid a significant reduction of their NCB, which would increase renewal premiums the following year.

Comprehensive cover's exclusive NCB protection allows car owners to retain their NCB even after making a claim. As long as the claim does not exceed the specified limit amount, the NCB will not be reduced. Some plans operate on a per-claim basis and only reduce the NCB if claims exceed once. As shown in Table 2, for standard motor insurance, as long as the total claims in a year do not exceed HK$60,000—and in some cases provided claims are not made more than once—the NCB will not be reduced.
Therefore, if a policyholder has only their first accident in the policy year and the claim amount is not too large, for example just minor scratches, they can go ahead and file a claim.

New cars just driven off the lot — even a minor scratch can be very painful for the owner, and if the car is water-damaged or written off in a single-vehicle accident it’s a nightmare. Most comprehensive insurance policies include a "new for old" clause that allows the owner a "one-for-one" replacement.

As long as the new car was purchased within one year, and an accident results in the vehicle being written off, if the specified requirements are met the insured will generally be compensated with a new car of the same make and model. However, if the vehicle is only partially damaged, the final payout will be calculated based on the vehicle’s depreciation.

Vehicle depreciation increases with years of use, causing the vehicle’s value to decline. Except for cars within their first year on the road, compensation for other vehicles will also be calculated at the depreciated value and will not follow the purchase price. Therefore, if the vehicle is older and depreciation is higher, the compensation received after a write-off will be very limited, making comprehensive insurance relatively less cost-effective.

Like the three-in-one policy, comprehensive insurance also has various deductibles — amounts the owner must pay when making a claim. As shown in Table 2, if the vehicle is unfortunately stolen, the applicable deductible is generally HK$5,000 to HK$11,250, and the insurance company will cover the remaining amount.

If the vehicle is hit while parked, or is damaged due to a momentary mistake causing a single-vehicle accident, comprehensive insurance will also cover the related losses.

Comprehensive insurance not only covers the vehicle, but also the medical expenses of the driver and passengers after injury. As shown in Table 2, medical compensation is generally paid per policy year and per accident, with a maximum of HK$5,000 per incident, and an annual maximum of HK$20,000 per person.

If the vehicle needs to be towed to a repair centre, comprehensive coverage also provides towing service coverage, generally up to HK$2,000 per accident.

If your vehicle is unfortunately damaged and needs to go into the workshop for repairs, it may take a few days at the least, or in severe cases, weeks. Comprehensive insurance not only covers the repair costs of the insured vehicle, but also reimburses the cost of renting a replacement car during the repair period, commonly for 5 to 7 days, allowing the insured to continue "having a car to drive".

Another selling point of comprehensive insurance is windshield coverage, typically reimbursing up to HK$5,000 to HK$6,000, with replacement limited to once per policy year. For example, if a stone chip on the highway causes the windshield to crack, you can receive a free or subsidized replacement.

Overall, comprehensive insurance offers broad coverage, but premiums are relatively higher compared with third-party cover, so it’s important to compare options before buying. Besides premiums, also compare various deductibles/excesses, as they will affect the final compensation, and pay attention to No-Claim Bonus (NCB) protection, which will affect the final premium.

Car owners should choose car insurance according to their needs. For example, if your lender requires comprehensive cover, or for a brand-new car you may consider comprehensive insurance to get full protection. However, if the vehicle purchased is relatively low-priced, buying only third-party cover is also acceptable. For things to watch out for when buying third-party cover, refer to our other article: [Online Comparison of Third-Party Prices] Car insurance premiums can differ by nearly 100% — Meaning of third-party insurance and a detailed explanation of deductibles

Note: This article was last updated on January 22, 2025.

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.