The cost of the insurance will depend on the vehicle and the driver's record. Coverage for a family car with no more than six seats should cost 1,050 yuan annually, with claims limited to 60,000 yuan, including 50,000 yuan for disfigurement or death, 8,000 yuan for medical treatment and 2,000 yuan for vehicle damage.

The industry regulator said the Compulsory Liability Insurance Policy was designed to ensure that victims of traffic accidents receive timely medical treatment and financial compensation.

Mr. Shi in Beijing says the premium a bit expensive but still acceptable.

"I started driving in early 1988. And due to my good driving record, my former commercial Liability Insurance cost me only 800 yuan. But as it's compulsory, I had to buy it. And I think several hundred yuan more is still acceptable."

Besides expenses, one clause of the new policy saying that any driver is liable to provide compensation for death, injury and damage -- whether he or she is at fault is irrelevant.

"I think it is weird. If I'm not responsible for the accident, why should I provide compensation?"

Meanwhile, other drivers think the clause of it being compulsory is a definite improvement compared to the existing voluntary insurance.

"When an accident happens, if the party who is not at fault also provides compensation, it will help reduce the pressure and losses on the party who is responsible. In this way, all of us can benefit."

But the experts say that although the new policy covers compensation for nearly all damages and injuries in road accidents, it's just a basic guarantee and the claims aren't enough to make ends meet when big accidents happen. So they suggest that drivers buy a complimentary voluntary liability insurance with a claims limit of 150,000 to 200,000 yuan.