Two road accidents involving Hong Kong tourists in Hokkaido, Japan, within a single week have brought a conduct question to the surface of the SAR’s travel insurance market: are licensed intermediaries meeting existing regulatory obligations to disclose rental vehicle coverage details at point of sale – and what are the consequences for a segment whose growth the Insurance Authority (IA) has directly attributed to rising travel demand?
The question carries real scale. Preliminary figures from the Japan National Tourism Organization (JNTO) show Hong Kong residents made approximately 2.52 million arrivals to Japan in full-year 2025, making Hong Kong the fourth-largest inbound source market by volume. Of the over 2 million Hong Kong residents who visited Japan in 2023, 88.6% travelled as free independent travellers (FIT), according to the ITE Hong Kong Outbound Report, which compiles data from official tourism authority sources. A 2025 ITE Hong Kong Public Visitor Survey of 4,242 respondents found 87% prefer FIT for short-haul trips and 72% for long-haul journeys – a model that in Japan frequently involves renting a vehicle, placing travellers in scenarios where rental vehicle deductible coverage becomes the directly relevant policy feature.
The Hokkaido incidents provided a concrete illustration. A two-vehicle collision on July 20 killed a 53-year-old Hong Kong woman and injured five others. A train-car collision the previous Thursday injured five Chinese tourists, including an off-duty police officer from the SAR, according to RTHK.
Selina Lau, chief executive of the Hong Kong Federation of Insurers (HKFI), addressed the incidents on an RTHK radio programme on July 22. She noted that most rental car companies in Japan provide only basic liability insurance and require travellers to pay a deductible for vehicle and property damage in the event of an accident – a cost that, in her example, could reach HK$7,000 and that Hong Kong travel policies typically cover through rental vehicle deductible coverage.
“The deductible means that you have to pay out of your own pocket. That’s why you need to check whether the travel insurance you purchased in Hong Kong covers this. In most cases, it is covered and offers protection through something called ‘rental vehicle deductible coverage,’” Lau said. If coverage exists in most policies, the problem is not primarily one of product design but of communication – travellers are not checking, which raises the question of whether they were adequately informed at the point of purchase.
That question has a direct regulatory answer. The IA’s Code of Conduct for Licensed Insurance Brokers – the First Edition issued in September 2019, for which no revised edition has been published – establishes General Principle 5 on disclosure of information. Under Standard and Practice 5.2, a licensed insurance broker must provide clients with all relevant information on the key features of each insurance product recommended or arranged, including major policy terms and conditions such as coverage, exclusions, and any other clauses that would reasonably be considered to adversely impact the client’s decision to enter into the policy. The code applies to general insurance products, including travel policies. The code also specifies that for travel insurance, the suitability assessment may be conducted as part of the application process, where the client’s circumstances include trip details, the ages of persons traveling, and the length of the journey. A self-drive itinerary in Japan – where rental vehicle deductibles are a foreseeable and material risk – would reasonably fall within that scope.
No public data is available on the frequency with which intermediaries fail to disclose rental vehicle deductible coverage or on claim volumes arising specifically from rental vehicle incidents involving Hong Kong tourists in Japan. The IA does not publish claims data at that level of granularity. The Hokkaido incidents nonetheless raise the question of whether the existing obligation is being met in practice for this class of travel.
The IA’s Annual General Business Statistics for 2024, published in December 2025, confirm that direct onshore accident & health business reached HK$21,365 million in gross written premiums, with the IA attributing sustained growth in the category since 2022 directly to growth in travel business and continued expansion of group medical business. IA provisional statistics for the first three quarters of 2024 break out travel insurance as a standalone line within that category at HK$1.5 billion. A full-year 2025 travel-specific figure was not available at the time of writing, as the IA’s Annual General Business Statistics for 2025 had not yet been published.
The broader onshore accident & health category, however, contributed HK$23.7 billion in direct general insurance premiums in full-year 2025, an increase of 10.8% year on year, according to IA provisional statistics released in April 2026. Growing policy volumes increase the number of policyholders for whom rental vehicle coverage terms are directly relevant – and for whom inadequate disclosure carries potential claims consequences.
Lau also outlined post-incident protocols with direct claims implications. She advised travellers to send a copy of their policy to a trusted contact in Hong Kong before departure, notify local police of all traffic accidents regardless of severity, and document the scene after ensuring their own safety – steps aligned with standard documentation requirements for traffic-related claims.
Ringo Lee, honorary life president of the Hong Kong, China Automobile Association, said on the same programme that some Hong Kong residents may not be accustomed to long-distance driving and may rely too heavily on GPS navigation at the expense of monitoring road conditions. He identified no-entry signs, one-way roads, and stop signs as those most frequently violated by Hong Kong drivers in Japan. JNTO data shows Hong Kong arrivals to Japan fell 6.2% in 2025 – partly attributable to an unsubstantiated earthquake rumour that circulated widely in Hong Kong during mid-2025. Even against that reduced volume, the Hokkaido incidents show the claims environment for self-drive travel remains active. As outbound volumes recover, the frequency of rental vehicle scenarios – and the disclosure obligations that attach to them – will expand accordingly.
