What types of insurance should be purchased for a vehicle?
3 Answers
For small passenger vehicles, it is sufficient to purchase the following four types of insurance: 1. Compulsory Traffic Insurance: According to China's traffic regulations, vehicles must pay an annual fee known as compulsory traffic insurance. It primarily provides compensation within liability limits for injuries or property damage caused to third-party victims. 2. Third-Party Liability Insurance: This provides compensation to third-party victims within the insured amount, but not exceeding 30% of the liability limit. 3. Vehicle Damage Insurance: If the vehicle sustains damage due to an insured accident, the insurance company will provide compensation within reasonable limits. 4. No-Deductible Insurance: As one of the additional insurance types, it transfers the portion that should be borne by the policyholder to the insurance company.
When I first got into insurance, I thought the core was to buy a few essential types. The foremost is compulsory traffic insurance, which is mandatory by the state—you can't drive without it, and it provides basic coverage in case of an accident. Next is third-party liability insurance; if you accidentally hit someone or their property, like a luxury car, this insurance covers the compensation. It’s recommended to have coverage of at least 1 million to feel secure. Vehicle damage insurance is also essential—it protects your own car, covering repairs whether the damage is from an accident or natural disasters. Adding no-deductible coverage ensures the insurer pays more of the out-of-pocket costs. With this combination, annual premiums of a few thousand yuan aren’t expensive and can prevent major losses. Don’t just focus on price—safety is the best investment. Also, park carefully to avoid unnecessary expenses.
Based on long-term driving experience, I recommend opting for more comprehensive insurance coverage. Compulsory traffic insurance is fundamental, but commercial insurance requires careful selection. I suggest third-party liability insurance and vehicle damage insurance as the core components. Additionally, consider supplementary coverage like standalone glass breakage insurance—if a flying stone cracks your windshield, replacing it won’t hurt your wallet. Theft insurance is also worthwhile, especially if you frequently park in remote areas, to guard against vehicle theft. Spontaneous combustion insurance is advisable for older cars with aging wiring, which poses risks. Scratch insurance is another good option, as minor scrapes are inevitable. Don’t overlook the fine print in insurance policies, such as claim coverage and deductibles. Choose a reliable provider and review your policy periodically to avoid disputes later. Safety comes first—a slight increase in premiums buys peace of mind for better sleep.
