What are the consequences of not renewing car insurance when it expires?
3 Answers
If car insurance expires and is not renewed, the owner will be responsible for any costs arising from accidents. Additionally, if caught by traffic police, the vehicle may be impounded and fines imposed. Legal basis: According to the "Compulsory Traffic Insurance Regulations," all owners or managers of motor vehicles driven on roads within the territory of the People's Republic of China must purchase compulsory traffic insurance. If the owner or manager of a motor vehicle fails to purchase compulsory traffic insurance as required, the traffic management department of the public security organ has the authority to impound the vehicle, notify the owner or manager to purchase insurance in accordance with the regulations, and impose a fine of twice the amount of the insurance premium that should have been paid. Types of motor vehicle insurance: Currently, domestic motor vehicle insurance mainly consists of basic insurance and additional insurance. Among them, compulsory traffic insurance is a statutory insurance that must be purchased, while commercial insurance can be voluntarily chosen by the vehicle owner.
I also hesitated before about whether to renew my car insurance, but then a friend who works in claims told me never to let it lapse. The most immediate hassle is failing the annual inspection—nowadays the system is networked and can instantly detect if you're uninsured, forcing you to come back and reinstate it. If you're pulled over by traffic police on the road, fines and points are the least of your worries; in serious cases, they can impound your car. The real kicker is when an accident happens—last time my neighbor rear-ended a Mercedes. Because he was in an insurance gap, he had to foot the entire 30,000 RMB repair bill himself and is still paying off the debt. Honestly, saving a few thousand in premiums isn't worth the peace of mind you lose, right?
Our car club just discussed this. Don't think skipping insurance renewal is just about saving money: first, without compulsory traffic insurance, you can't legally drive - get caught by traffic cameras and your car gets impounded. If you're unlucky enough to hit someone, it's worse - medical bills and lost wages all come out of your pocket, and without a million in savings, you're screwed. My former colleague Lao Zhang skidded in the rain and hit a tree - 40,000+ in repairs, all because he forgot to renew his expired insurance. Also factor in your car's depreciation - my five-year-old car's insurance is the last line of defense for its residual value. If you really don't want to renew, go deregister your plates at the DMV ASAP.
