Three Must-Have Insurances for Private Cars in 2021?
3 Answers
Private cars must purchase Compulsory Traffic Accident Liability Insurance (CTALI), Third-Party Liability Insurance, and Vehicle Damage Insurance. CTALI has the following two characteristics: From a legislative perspective, it is a legally mandatory insurance: According to legal procedures, all motor vehicle owners or managers must purchase CTALI. Article 5 of the 'Regulations for the Implementation of the Road Traffic Safety Law' stipulates CTALI as a mandatory requirement for obtaining vehicle license plates and registration certificates—no insurance, no driving. From a societal perspective, it serves as a social management tool: CTALI was established to address the frequent social hazards of traffic accidents. The effective compensation for personal and property losses caused by traffic accidents requires a stable source of funding. The unpredictable nature of traffic accidents means individuals cannot promptly and effectively respond to the sudden risks they pose.
After driving for so many years, I believe there are three types of insurance that private car owners absolutely shouldn’t skip. Compulsory traffic insurance is legally required—without it, you can’t drive on the road, and we all know that. Then, third-party liability insurance is especially important. With so many luxury cars on the road these days, if you accidentally hit a Porsche, you really can’t afford the compensation without insurance. I recommend coverage of at least 1 million yuan—the premium is only a few hundred yuan more. Comprehensive insurance (covering damage to your own vehicle) is also a must, especially for new cars or those bought with a loan. If you get a scratch or a collision, at least you won’t have to pay a hefty repair bill out of pocket. This money is worth spending—it can save you tens of thousands in critical moments.
I just renewed my car insurance recently. After chatting with some experienced drivers, I learned that there are only three truly essential insurance policies for private cars: compulsory traffic insurance, third-party liability insurance, and vehicle damage insurance. Compulsory traffic insurance is the basic coverage and mandatory; I opted for 2 million coverage for third-party liability, mainly because there are many luxury cars and pedestrians in big cities these days, and accidents can be costly. As for vehicle damage insurance, my car was hit by hail last year, and this insurance covered the repair of the windows and roof. Other policies like scratch insurance can be considered based on circumstances, but these three are the fundamental safeguards, especially for cars under five years old. Saving a little money now might lead to big losses later.
