Motor vehicle insurance

Motor vehicle insurance is an important type of insurance, accounting for 54% of property insurance premium income in 2024. It can be classified into compulsory insurance and voluntary insurance. China practises a compulsory motor vehicle third-party liability insurance scheme, which offers insurance cover to all the vehicles to the amount of liability up to ¥200,000. This amount may be insufficient to cover the loss of personal injuries or death and property damages when an accident occurs. Voluntary commercial motor insurance is complementary to compulsory insurance and covers the amount of the insureds’ liability on top of that under the compulsory insurance. China also establishes a scheme of the Road Traffic Accident Social Relief Funds, which is used for some special circumstances. This chapter considers how motor vehicle insurance operates in China, discusses statutory law, the State Council&s;s regulations, and the Supreme People&s;s Court&s;s judicial interpretations to the statutory provisions governing the operation of motor vehicle insurance, and puts forward some suggestions on the reform of the laws and regulations.