What Insurance Policies Are Required for a Car?

[SamanthaMarie]

Generally, car insurance requires the purchase of compulsory traffic insurance, vehicle damage insurance, and third-party liability insurance. Insurance should be selected based on your actual situation. Additional details are as follows: 1. Compulsory Traffic Insurance: As one of the legally mandated insurances, compulsory traffic insurance stipulates that if any loss is caused to a third party, regardless of fault or whether compensation is required, the insurance company must pay a certain amount to the affected party. However, in the case of at-fault accidents, the cost may increase by 10%-30% based on the annual frequency or number of occurrences. 2. Vehicle Damage Insurance: Vehicle damage insurance is also typically a must-have. For everyday issues like scratches and dents, repair costs can be claimed from the insurance company. Particularly in accidents where the responsible party cannot be identified, the insurance company will cover 70% of the costs. It's important to note that compensation under vehicle damage insurance is calculated based on the car's usage time and depreciation, with an annual depreciation rate typically set at 7.2%. Purchasing this insurance is a reliable way to mitigate financial losses. 3. Third-Party Liability Insurance: This insurance covers the financial liability that the insured must bear due to their own fault or negligence causing personal injury or property damage to a third party, as required by law or convention. In motor vehicle third-party liability insurance, it refers to the financial responsibility the insured must bear if an accident occurs while using the insured vehicle, resulting in bodily injury or direct property damage to a third party. The insurance company is responsible for compensation. Additionally, if the insured incurs arbitration or litigation costs with the insurance company's written consent, the insurer will cover these costs beyond the liability limit, up to a maximum of 30% of the liability limit. 4. No-Deductible Insurance: In many accidents, insurance companies apply a 5-20% deductible rate. However, if the policyholder purchases this insurance, all liability and compensation amounts are transferred to the insurance company, allowing the policyholder to receive more compensation.