What types of car insurance are necessary when purchasing a vehicle?
2 Answers
When purchasing a car, the following types of insurance are essential: 1. Compulsory Traffic Insurance: This is a mandatory insurance required by Chinese law, so all car owners must purchase it. Driving without compulsory traffic insurance is illegal, and if caught by traffic police, the driver may face penalties such as fines, demerit points, or even detention in severe cases. 2. Third-Party Liability Insurance: This insurance primarily covers damages to another vehicle if the insured car is involved in a collision while driving. The compensation is entirely paid by the insurance company. Currently, the coverage amounts for third-party liability insurance are 500,000 and 1,000,000 RMB. Owners who want extra peace of mind can opt for higher coverage. 3. Vehicle Damage Insurance: This refers to a commercial auto insurance where the insurer compensates for damages to the insured vehicle caused by accidents during driving, within reasonable limits.
Car insurance is necessary after buying a car, and I think new drivers should opt for comprehensive coverage. Compulsory traffic insurance is a legal requirement and cannot be skipped. Third-party liability insurance is the most critical, with coverage starting at least 500,000 yuan; otherwise, you could face huge compensation costs if you hit a luxury car or a pedestrian. Vehicle damage insurance protects your own car, especially for new cars—don’t skimp on it, as minor scratches and accidents can be repaired. Passenger liability insurance safeguards family and friends riding in your car; the coverage isn’t high but is very practical. Additionally, it’s advisable to add a no-deductible insurance option to save on out-of-pocket expenses. Optional insurance like theft coverage is worth considering if you live in a high-risk city, otherwise, it’s unnecessary. In short, don’t cut corners and risk major losses to save small amounts.
