What is the difference between compulsory traffic insurance and commercial auto insurance?
2 Answers
The differences between compulsory traffic insurance and commercial auto insurance are as follows: 1. Nature: Compulsory traffic insurance is mandatory by the state, while commercial auto insurance is voluntary, with the contract established between the policyholder and the insurance company under conditions of mutual consent and equality. 2. Coverage: Compulsory insurance offers broad coverage with lower insurance amounts, whereas commercial insurance provides relatively limited coverage but higher insurance amounts. 3. Compensation principle: In the event of a traffic accident causing personal injury, death, or property loss, the insurance company first compensates within the liability limit of compulsory insurance. For commercial insurance, compensation is determined based on the policyholder's or insured's liability in the accident.
I've been driving for over a decade and think this is quite important. Compulsory traffic insurance is mandatory by the state—you must purchase it. It mainly covers third-party bodily injury or property damage, like if you damage someone else's car or injure a pedestrian, but the coverage is limited and doesn’t protect your own car or yourself. Car insurance from insurance companies is voluntary and includes many optional add-ons, such as vehicle damage insurance to repair your own car, enhanced third-party liability insurance for higher payouts, or additional driver and passenger coverage. The cost varies based on the car model and driving record. For everyday driving, I recommend that beginners opt for full commercial insurance—if a major accident happens, compulsory insurance alone won’t be enough, and covering the rest out of pocket would be a huge loss. In practice, you need both. Otherwise, like my neighbor who recently hit a luxury car, relying only on compulsory insurance meant he had to pay half the damages himself.
