Carry sufficient third-party motor liability coverage; China's compulsory limits are modest
When you are liable, compulsory cover has separate limits of RMB 180,000 for death/disability, RMB 18,000 for medical costs and RMB 2,000 for property damage. Unused allowance in one category cannot fill another. Injury compensation can exceed them substantially, leaving your household responsible unless additional insurance responds.
What it takes
Commercial third-party cover costs hundreds to over a thousand renminbi yearly in China. Higher limits generally cost less per unit of coverage.
What you may gain
China's compulsory motor insurance uses nationwide limits by category, including separate no-fault limits. After the 2020 reform, total liability coverage rose from RMB 122,000 to RMB 200,000: death/disability from RMB 110,000 to RMB 180,000, medical expenses from RMB 10,000 to RMB 18,000, and property damage unchanged at RMB 2,000. When the insured is not liable, the limits are RMB 18,000, RMB 1,800 and RMB 100 respectively. The liable party bears amounts beyond applicable coverage. Failure to carry compulsory insurance can lead to vehicle detention and a fine of twice the required premium.
Context & considerations
Regulators may revise limits; these are the source's figures following September 2020, worth checking before purchase. The key is separate categories: unused coverage cannot transfer between them. Severe injury compensation can far exceed compulsory cover. The book does not prescribe a commercial limit, but regards additional coverage as one of the few cases where several hundred renminbi can transfer a rare loss capable of overwhelming a family.
Research & references
State Council of China (2006, amended 2012). Regulations on Compulsory Motor Vehicle Traffic Accident Liability Insurance, Orders No. 462 and 618. Article 23 establishes nationwide category limits set jointly by the insurance regulator and relevant State Council departments; Article 21 concerns compensation within limits; Article 39 provides detention and twice-premium fines for noninsurance. http://www.gov.cn/gongbao/content/2012/content_2131962.htm ; China Banking and Insurance Regulatory Commission (2020). Guiding Opinions on Comprehensive Motor Insurance Reform, document No. 41, section IV(4), specifying the increased limits. https://www.gov.cn/gongbao/content/2020/content_5567758.htm