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Car insurance in China

If you’re going to drive a car in China, you’re going to need some form of car insurance – as with many other countries, China requires all drivers to be insured to a minimum standard before driving.. Here’s an introduction to the types of cover on offer.


Traffic compulsory insurance

Traffic compulsory insurance covers third-party liability (ie. cover in the event of an accident causing injury or death of another person, excluding the driver holding the policy and passengers in their vehicle). Financial compensation for the third party is also covered, though limited. The driver holding the policy is not insured for damage to their own car, or for injury to themselves.


Third-party liability

Many drivers will also buy a separate third-party liability insurance policy. These policies are similar to traffic compulsory insurance – again, neither the driver holding the policy nor their passengers are insured. The key difference is that these policies allow drivers to choose their own desired maximum rate of compensation (some much higher than the limit available under traffic compulsory insurance).


Additional policies

Drivers can also add a number of extra types of cover. Some of these get quite obscure, but among the most popular are:

  • Vehicle damage insurance, covering damage to the policy-holder’s vehicle.
  • Passenger insurance, sold by the seat and covering injuries to, or death of, the policy holder’s passengers.
  • Driver insurance, covering injury to the driver and policy holder.
  • Theft insurance, covering theft not only of the vehicle but of all objects contained inside.
  • Quota-free insurance. Under traffic compulsory insurance, if the policy holder is held responsible for an accident, they must pay 20 percent of the compensation themselves (ie. the insurance company will only cover 80 percent of the compensation). With a quota-free insurance policy, the insurance company will pay 100 percent of the compensation, no matter who is held responsible for the accident.

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One Response to Car insurance in China

  • I have owned a car for 3 years now in China. I have bad 4 seprate occasions whereby another car as smashed or bumped into my car. It has always been a case of the offender having my car taken away and repaired by their insurance, I have a question as my assistant has told me that during my serviec now that my new battery the “suddenly” does not have 2 year warranty now only has a 1 year warranty. The insurance company that i belong to offers a pick-up servie for my car if it breaks down. They are now telling me that insurance in China means that i must pay for all and that i would then be paid back a week later. This cannot be the case as this does not constitute the basic structure and reason for insurance. I can understand paying an annual fee but not paying for all costs first for my insurnace. I paid my insurance for one whole year upfront securetising myself and my car.

    This does not make any sense as if someone owned a car valued at RMB 450 000,00 and it was destroyed in an accident or strom are they now saying that the client would ahve to pay the full RMB 450 000.00 to get the car replaced?

    Please can someone who knows this “new” left field approach please reply to me with the rules that govern the insurance industry. I a sure iw ould be like most thing sin China be alarmed at many other factors that might be floating around…

    Many tahnks

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