Why pro-establishment camp faces mounting insurance bills

November 28, 2019 16:26
Lawmaker Chan Kin-por, who represents the insurance sector in the Legco functional constituency, said insurance policies that cover “riots” often cost a lot more in terms of premiums. Photo: HKEJ

Following the District Council elections that saw the pro-establishment camp suffering a severe drubbing, some of their members who were lucky enough to get re-elected are now facing another headache: insurance companies are dragging their feet on the processing of their claims for compensation for the repair of their vandalized district offices.

The reason is that most of these pro-Beijing DC members didn’t insure their local offices against “riots”. As a result, although some insurance companies didn’t reject outright their claims for damages inflicted by anti-government protesters, these companies appear sluggish in validating their claims.

It is understood that even if the insurers agree to pay their insurance claims, the premiums for certain “high-risk” DC members are going to soar – especially if the civil unrest continues.

In the worst-case scenario, some insurance firms may even reject their applications for renewing their insurance policies.

As the unrest drags on, the district offices of pro-establishment DC members are deemed potential targets of the “valiant faction”.

According to some members of the pro-Beijing bloc, the local offices of their district councillors have been vandalized more than 300 times so far. In fact, one office has recorded seven incidents of vandalism.

Earlier, the Home Affairs Department sent letters to all DC members, notifying them that each would be entitled to a one-off subsidy of up to HK$50,000 to cover the costs for repairing, restoring or relocating their district offices as a result of the ongoing protests.

The department also agreed to provide another one-off payment of no more than HK$10,000 for each DC member to enhance the security equipment of their district offices.

In both cases, the payments will be provided in the form of reimbursements.

However, as a pro-establishment DC member whose local office had been vandalized told us that the HK$60,000 subsidy was not enough to cover the costs.

For example, he said, buying a new large office printer will use up almost the entire funding. Besides, they will have to pay for the repairs and other expenses before they are reimbursed.

Lawmaker Chan Kin-por, who represents the insurance sector in the Legislative Council functional constituency, told us that under most circumstances, district councillors would only get their local offices insured on “property all risks”, under which they can claim for “malicious destruction” of property.

However, only very few of them, or perhaps none, would insure their properties against “riots” because, first, Hong Kong has rarely seen any large-scale riots in recent decades and, second, insurance policies that cover “riots” often cost a lot more in terms of premiums, Chan said.

The only exception he could think of is the Legco complex, which has been insured against “riots” following the 2014 Occupy Movement.

Besides, as many DC members’ offices are located in residential areas rather than potential riot scenes, Chan admitted that he doesn’t know for sure whether vandalism against such properties would be defined as “riots” or “malicious destruction” under the current practice of the insurance industry.

The only thing for certain is that the final word on the matter rests with insurance companies, he said.

Another big problem facing pro-Beijing DC members is that even if insurers pay for their repair bills, these companies are likely to either substantially raise their premiums once they renew their policies, or simply reject their applications, particularly in the case of “high-risk” political figures or those whose local offices are located in protest hotspots such as Wan Chai and Tsim Sha Tsui.

This article appeared in the Hong Kong Economic Journal on Nov 25

Translation by Alan Lee

[Chinese version 中文版]

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Columnist of Hong Kong Economic Journal.