What Does Compulsory Auto Insurance Cover?
2 Answers
Compulsory auto insurance covers personal injury and property damage to victims (excluding occupants of the insured vehicle and the policyholder). Additional details about compulsory auto insurance are as follows: 1. Payment Time: After purchasing a motor vehicle, the insurance must be paid when obtaining a temporary license plate from the vehicle management office or during the formal registration process. For the second year, compulsory insurance can be paid up to 30 days before the vehicle's registration date. Vehicles without compulsory insurance are not permitted on the road, and in the event of an accident, the insurance company will refuse compensation. 2. Fee Standards: The premium for compulsory insurance is based on the vehicle's usage, whether it is for commercial or non-commercial purposes. It also considers the number of seats in the vehicle, with five-seat and six-seat vehicles following one standard, while seven-seat and other seat configurations follow different standards.
As a new driver who just got my license, I initially found compulsory auto insurance (also known as traffic accident liability insurance) quite complicated. But in reality, it's a mandatory coverage required by the state, mainly covering compensation for losses to other parties involved in accidents. Specifically, if I hit someone while driving, this insurance will pay three types of expenses to the other party: death/disability compensation (the largest portion), medical costs like hospitalization and medication fees, and property damage such as vehicle repairs or broken items. However, it doesn't cover damage to my own car or injuries to people in my vehicle - those require commercial insurance supplements. I've learned that purchasing it is a legal obligation; you can't drive without it, preventing situations where you'd have to pay full compensation out of pocket. The cost is reasonable, calculated based on engine displacement, ranging from a hundred to several hundred yuan annually, providing basic protection for traffic safety responsibilities.
