What are the mandatory insurances required when purchasing a new car?
3 Answers
National regulations require the compulsory purchase of compulsory traffic insurance. Below is relevant information about compulsory traffic insurance: 1. Compulsory Traffic Insurance: This is a legally mandated insurance in China that every vehicle owner must purchase. It effectively ensures basic insurance claims when traffic accidents occur. 2. Financial Compensation: In the event of a traffic accident, compulsory traffic insurance can cover difficult-to-pay financial compensations. Failure to purchase compulsory traffic insurance as required may result in the traffic management authorities detaining the vehicle and imposing a fine of twice the amount of the insurance premium due. 3. Base Premium: If no accidents occur during the insurance period, the renewal premium the following year will decrease by 10% from the base premium, with a maximum reduction of 30%. However, if multiple accidents occur, the premium for the following year may increase, up to a maximum of 30%, or even result in the insurance company refusing coverage.
When I bought my first car, I was also confused about which insurances were mandatory. Compulsory traffic insurance is required by the state—you can't hit the road without it, and it mainly covers the other party's personal injury and property damage. Among commercial insurances, third-party liability insurance and vehicle damage insurance are the most practical. For third-party insurance, I recommend a coverage of at least 2 million yuan—there are so many luxury cars on the road now, and a minor scratch could cost you a fortune. Vehicle damage insurance covers repairs for your own car, and fixing a new car after a collision can be very expensive. Additionally, I suggest getting an out-of-pocket medical expense liability insurance—if an accident happens and the other party needs imported medication, you'd have to pay out of pocket otherwise. Seat insurance is actually quite useful, as it covers the portion of medical expenses for injured family or friends that regular health insurance doesn't. As for scratch insurance and glass insurance, it depends on personal preference—I added them because my car kept getting scratched in the parking lot, but veteran drivers often say they're optional.
When buying a new car for my daughter, I spent half a month researching insurance. Compulsory traffic insurance is non-negotiable and must be purchased, just like the car's ID. For commercial insurance, focus on three main areas: vehicle damage insurance covers repair costs, especially important for new cars; third-party liability insurance should ideally start at 3 million in coverage, as human life is precious and compensation can be staggering. I added passenger liability insurance for the whole family with sufficient coverage, since my child often sits in the back without wearing a seatbelt and we need to be prepared. Also, don’t forget the additional medical expenses insurance outside of basic healthcare—it costs just a few dozen yuan but can be a lifesaver in critical moments. As for flood insurance, it depends on the city; we added it because of the annual heavy rains here. As for standalone glass breakage insurance or spontaneous combustion insurance, they’re unnecessary for a new car since vehicle damage insurance basically covers those risks.
