What are the mandatory insurances for small cars?
2 Answers
Small cars must purchase compulsory traffic insurance, which is officially known as Compulsory Motor Vehicle Traffic Accident Liability Insurance. This insurance is provided by insurance companies to compensate for personal injuries, deaths, and property losses (excluding the vehicle's occupants and the insured) caused by the insured motor vehicle in road traffic accidents, within the liability limits. Compulsory traffic insurance is China's first mandatory insurance system implemented by national law, with premiums uniformly regulated by the state. The main factor affecting the price of compulsory traffic insurance is the number of car seats. Both the Compulsory Motor Vehicle Third-Party Liability Insurance and the current Motor Vehicle Third-Party Liability Insurance are commercial insurances. The newly implemented compulsory traffic insurance premium rate is higher than that of the Motor Vehicle Third-Party Liability Insurance. The Third-Party Liability Insurance determines its compensation liability based on the insured's responsibility in the traffic accident.
As a veteran driver with over a decade of experience, I believe the compulsory insurance for any vehicle is the compulsory traffic insurance, which is legally mandated. It covers basic compensation for third-party personal injuries and property damage. For instance, if you accidentally hit someone, it can at least cover some medical expenses. The premium is determined by the vehicle type, typically costing a few hundred yuan per year, and must be renewed on time to avoid fines and vehicle impoundment by traffic police. However, the coverage of compulsory insurance is limited. I learned this the hard way when I had to pay tens of thousands out of pocket for an accident. That’s why I strongly recommend adding third-party liability insurance, which increases the compensation limit and provides more comprehensive protection for others. Additionally, new cars are best paired with vehicle damage insurance to safeguard your own car with less hassle. In short, the only must-have is compulsory insurance, while others depend on personal budget.
