What are the three must-have insurances for a car?
2 Answers
The must-have insurances for a car include: compulsory traffic insurance, third-party liability insurance, vehicle damage insurance, and passenger liability insurance. These are essential coverages. Compulsory traffic insurance is a mandatory insurance in China, and all vehicles must purchase this coverage. In the event of a traffic accident, the insurance company can only compensate the party that was hit, meaning the conditions for compensation are quite limited. Additionally, without compulsory traffic insurance, the vehicle will lose its eligibility for annual inspection. Therefore, compulsory traffic insurance is a must. Vehicle damage insurance is the most comprehensive necessary coverage. Whether the car suffers from collisions, scratches, water damage, or other harm, the insurance company will provide compensation. However, the final compensation amount depends on various factors such as the cause of the incident and the extent of the damage. Passenger liability insurance, also known as seat insurance, refers to the passenger portion of the vehicle's liability insurance. It covers situations where a qualified driver permitted by the policyholder causes an accident while using the insured vehicle, resulting in bodily injury or death to passengers inside the vehicle. The insurance company will compensate according to the insurance contract for the legal liability the policyholder must bear. Passenger liability insurance is a major component of commercial vehicle insurance, primarily functioning to compensate for injuries or deaths of passengers caused by traffic accidents.
I've been driving for over twenty years, and based on my experience, the three must-have car insurances are compulsory traffic insurance, third-party liability insurance, and vehicle damage insurance. Compulsory traffic insurance is government-mandated; without it, you can't get your car licensed, and parking violations are strictly monitored. For third-party liability insurance, the higher the coverage, the better—I recommend starting at one million. In cities, there are many luxury cars and reckless pedestrians; a minor collision could lead to bankruptcy if you can't afford the compensation. Last year, I saw a friend who didn’t have third-party insurance crash into a Maserati—he drained his savings and still ended up in debt. Vehicle damage insurance protects your own car, making repairs hassle-free and cost-effective, especially for new cars prone to scratches and needing maintenance. An additional suggestion is to add passenger insurance for safer family trips. Premiums are calculated based on the car’s value—a few thousand a year buys peace of mind and is worth it. Renew on time without delay.
