The Hong Kong government has confirmed that motor insurers must compensate injured third parties first, even when a cross-border driver causes an accident using an unapproved Advanced Driver Assistance System (ADAS) on the city’s roads.
The confirmation came in a written reply to Hong Kong’s Legislative Council on October 7, 2026. Secretary for Transport and Logistics Mable Chan addressed questions from legislator Lau Ka-keung about insurance, liability, and the regulation of autonomous vehicles (AVs) and driver-assist technology.
The issue centres on vehicles entering Hong Kong under the Southbound Travel for Guangdong Vehicles (STGV) scheme, which allows mainland Chinese drivers to bring their cars into the city. Reports have emerged that some of those drivers are activating ADAS features not approved by the Transport Department (TD) for use on Hong Kong roads.
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Under the Motor Vehicles Insurance (Third Party Risks) Ordinance (Cap. 272), third-party liability for bodily injury or death is covered by statutory protection regardless of whether the driver was using an unapproved system.
The government’s reply states that even if activating an unauthorised ADAS falls within a policy’s exclusion clauses, “the insurance company must still compensate the affected third party first, and may subsequently recover the relevant amount from the insured.”
Third-party property damage is treated differently and handled according to individual policy terms and the circumstances of the accident.
For brokers and underwriters, this creates a recovery risk. The insurer pays out, then pursues recovery from the policyholder. The practical question is how often that recovery succeeds when the insured is a mainland driver who may have returned across the border.
Hong Kong’s motor vehicle insurance market covered more than 952,000 vehicles and generated HK$5.16 billion in gross premiums in 2023, the most recent year for which class-level data is available from the Insurance Authority.
On December 23, 2025, the first day of the STGV scheme, a mainland driver activated an unapproved intelligent driving system in an electric vehicle on Chek Lap Kok Road near the Hong Kong-Zhuhai-Macao Bridge port, according to The Standard. Video shared on social media showed the driver removing both hands from the steering wheel. The TD issued a warning letter and said the driver could be permanently barred from future trips under the scheme.
The STGV scheme has since expanded. As of the end of May 2026, approximately 8,400 applications had been approved for urban-area entry, with around 6,700 travel bookings completed, according to a Hong Kong government announcement. The daily booking quota for urban entry doubled from 100 to 200 vehicles per day in July 2026, and the scheme grew to all nine Greater Bay Area mainland cities, with plans to cover all 21 Guangdong cities by the first quarter of 2027.
That growth means more vehicles driven by owners who may be unfamiliar with local rules on ADAS use.
Drivers who use an unapproved system, or who take their hands off the steering wheel while relying on one, may face charges of careless or dangerous driving. Penalties upon conviction include fines, licence revocation, and imprisonment.
The TD also follows up separately under the STGV scheme. Violations can be reported to the Guangdong Provincial Government, and the travel eligibility of vehicles involved can be suspended or revoked.
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The broader context is Hong Kong’s push toward commercial autonomous driving. The TD had issued at least eight AV pilot licences by August 2026, based on government announcements, with trials running across locations including North Lantau, Cyberport, Kai Tak, Hong Kong Science Park, and West Kowloon. On Airport Island alone, cumulative trial mileage reached approximately 140,000 km by April 2026, according to the TD.
Under the Road Traffic (Autonomous Vehicles) Regulation (Cap. 374AA), the definition of “driver” extends to backup operators inside the vehicle, nearby, or in a remote control room. All pilot AVs must carry journey recorders to capture operational data for post-accident investigation.
“Generally speaking, depending on the cause of the occurrence and the proof adduced, liability (whether criminal or civil) will be borne by the operator, the vehicle owner, or the supplier of the vehicle,” the government stated.
The TD said it has been in discussions with the insurance industry about coverage for more advanced deployment where no backup operator is on board.
Hong Kong’s overall insurance market recorded HK$827 billion in total gross premiums in 2025, up 29.7% year-on-year, with general business gross premiums reaching HK$108.5 billion, according to provisional figures from the Insurance Authority. How motor products adapt as assisted and autonomous driving technology spreads across the Asia-Pacific insurance landscape is a question the market has yet to answer.
