A dazzling glow like a firefly amidst the darkness | The 3% MIB levy in car insurance
Have any savvy car owners noticed an extra 3% MIB levy when buying new or renewing their insurance policies in October?
This levy wasn't charged when they bought their car insurance in the past year. Can they refuse to pay this extra levy?
Where does this 3% MIB levy come from? What exactly is MIB?
Is the MIB 3% levy important? It supports the deserved compensation for those injured or killed in traffic accidents and their families!
Actually, MIB stands for Motor Insurance Bureau of Hong Kong, and the 3% MIB levy is a fee collected by the bureau. Due to the economic downturn caused by the 2021 pandemic, the Motor Insurance Bureau of Hong Kong suspended the MIB levy for one year to alleviate the financial burden on car owners, only resuming the levy this October. Therefore, if you received your September quote and decided to insure your vehicle in October, you will need to pay the 3% MIB difference!
As is well known, Hong Kong law requires all vehicles on the road to have valid third-party liability insurance. If the vehicle involved in an accident is not insured, the policy is invalid, or the driver abandons the vehicle, the victim will lose the compensation they are legally entitled to. This is where the Motor Insurance Bureau comes in: ensuring that, under the Motor Insurance (Third-Party Risk) Ordinance, victims or their families in such situations can receive legally due compensation or discretionary relief to alleviate their immediate financial difficulties after an accident. The small contributions of car owners can be a vital lifeline in helping others
The MIB fee is used appropriately
Although the MIB 3% levy is a uniform levy, the scope to which the levy is allocated is different, in order to ensure that traffic accident victims in different situations can obtain the compensation they are legally entitled to
1️⃣ First Fund Plan (applicable when the vehicle is not under valid insurance/the relevant policy is invalid) (current rate is 1%)
2️⃣ Second Fund Plan (applicable when the insurance company is insolvent) (currently the rate is 2%)
If traffic accident victims encounter difficulties in making claims, such as in the following three situations, the MIB can assist them in obtaining compensation
❌No insurance
💥Unable to find the vehicle involved in the accident🚗💥💨
🏚️Insurance company goes bankrupt
In summary, the MIB's 3% levy is sufficient to cover gaps in auto insurance coverage. For example, if Taiga Insurance goes bankrupt, the MIB will take over and assist the owner and driver with related accident claims; or, in the absence of insurance, if a court-ordered compensation amount owed by the owner or driver is not paid within 28 days, the compensation will be paid by the MIB
Therefore, the 3% MIB levy collected from each car insurance policy may seem insignificant, like a firefly, but when accumulated, it becomes a vital pillar that can bring light to victims of traffic accidents!
Reference: Hong Kong Motor Insurance Bureau http://www.mibhk.com.hk/chi/