Get to know China's motor insurance reform

【內地車保綜合改革】交強險知多啲

Effective on September 19th, China recently announced a "Guideline for Implementing Comprehensive Reform of Car Insurance". The new rules drastically increase the coverage limit from RMB $120,000 to RMB $200,000 RMB for China’s compulsory traffic accident liability insurance. With that said, what is traffic accident liability insurance

Today at Kwiksure, our insurance experts will give you the lowdown on things to keep in mind when buying car insurance for China. Cross the Hong Kong-Zhuhai-Macao Bridge (HKZMB) or ports of your choice worry-free.

What is traffic accident liability insurance?

Also known as China’s compulsory traffic accident liability insurance for motor vehicles, this is mandatory for drivers in China. When a traffic accident occurs, causes injury or death (excluding the policyholder and their passengers), and financial/property losses, your insurer will compensate you. Of course, this is as long as the expenses you incurred are within the coverage limit. 

Set and standardized by China, the coverage amount is the same whether your accident occurs in Beijing or Sichuan. Note that depending on your car model, the premium for traffic accident liability insurance will differ. However, this is primarily determined by the number of seats in your vehicle. 

Keep in mind that there are several exclusions to the liability insurance:

  • Victim intentionally caused the traffic accident
  • Monetary losses suffered by the policyholder and their insured vehicle
  • Indirect losses that resulted from the event, such as the victim being banned from driving or is no longer fit to work
  • Litigation or arbitration fees from incident-related disputes

China's comprehensive reform of motor insurance 

The maximum coverage shoots up in this comprehensive reform. Compulsory traffic liability insurance is divided into two types: a plan with a liability limit and one without. This is particularly worth mentioning due to the huge difference between Hong Kong car insurance and non-liability compensation. Even if you're found to be not responsible for a traffic accident in the Mainland, your insurer still needs to make non-liability compensation to the driver of the other party. However, this type of compensation is only slightly lower than liability compensation.

Liability coverage

 

Before adjustment

After adjustment

Death and injury coverage

RMB $110,000

RMB $180,000

Medical fees coverage

RMB $10,000

RMB $18,000

Property and financial losses coverage

RMB $2,000

RMB $2,000

Total liability coverage

RMB $122,000

RMB $200,000

Non-liability coverage

 

Before adjustment

After adjustment

Death and injury coverage

RMB $11,000

RMB $18,000

Medical fees coverage

RMB $1,000

RMB $1,800

Property and financial losses coverage

RMB $100

RMB $100

Total non-liability coverage

RMB $12,100

RMB $19,900

 

Compensation details for compulsory traffic accident liability insurance

There are three types of compulsory traffic accident liability insurance in China: death and injury liability coverage, medical fees coverage, and financial losses coverage.

Death and injury coverage

This coverage could potentially compensate you for a wide range of costs. These include, but are not limited to:

  • Funeral expenses
  • Death compensation expenses
  • Transportation fees for the victims' relatives while they are handling funeral matters
  • Disability compensation
  • Costs of disability assistive devices
  • Nursing expenses 
  • Rehabilitation expenses
  • Transportation expenses
  • Dependents' living expenses
  • Accommodation fees
  • Expenses incurred while you're forced to take a break from work
  • Mental health relief fund paid by the insured person in accordance with the court's judgment or through mediation

Medical fees coverage

Medical fees coverage include:

  • Medication fees
  • Diagnosis and treatment costs 
  • Inpatient fees 
  • Hospital food subsidy
  • Mandatory and reasonable follow-up treatment costs, cosmetic surgery fees, and nutrition fees

Financial losses coverage

It refers to what the policyholder is liable to pay to the victim for their financial losses after your vehicle causes an accident. 

Get in touch with Kwiksure for cross-boundary car insurance plans

If you're a Hong Kong driver heading up north, buying multiple insurance plans on your own can be time-consuming. Kwiksure now provides compulsory traffic accident liability insurance for China. This also includes car insurance for HKZMB's two or three jurisdictions, Macao's single-plate vehicles and Hong Kong vehicles heading north into the Mainland. With one phone call, you can easily meet the car insurance requirements for all three jurisdictions.

As the leading car insurance broker in Hong Kong with over 20 years of experience, our insurance advisors are dedicated to meet your needs. We're happy to help you compare plans to find one that best suits your needs and budget. Get a free quote today with our online quotation tool! Want to chat with us? Contact our team of service experts for impartial advice and personalized service!