Starting July 1st, under a new policy published by China's top insurance regulator, owners of China's 130 million motor vehicles will have to purchase compulsory insurance to cover all accidents occurring between motor vehicles.
Thanks to the new regulation, victims of traffic accidents will receive timely compensation—a maximum of 60,000 Yuan, or about 7,500 US dollars—from insurance companies before accident liability is defined.
Yixiu has more.
Reporter:
 Starting next month, before taking the road, drivers across China will have to purchase the country’s new compulsory accident insurance. Rates will differ, depending on the type of vehicle.
Under the new policy's "compensation first" principle, insurance companies will have to pay for losses incurred in an accident before it is determined who is at fault.
China Insurance Regulatory Commission, the industry regulator, says the policy is designed to make sure victims of traffic accidents receive timely medical treatment and financial compensation.
An expert in vehicle insurance with the Beijing Insurance Association named Li Feng explains how the procedure works when a traffic accident takes place and a victim needs first aid.
"Under the new regulation, insurance companies must pay for medical treatment in advance and give victims financial compensation with limited liability. When the case is settled, the insurance company has the right to reclaim the money if the driver is determined to have been responsible for the accident.”
The new commission is different from the current procedure, under which traffic accident victims have to approach drivers first, and are compensated only after the insurance company pays the vehicle owner.
Li Feng views the regulation as a move to make insurance companies take a more active role in public safety rather than just focusing on commercial business.
“The new regulation is not only aimed at providing better care and financial aid to victims of traffic accidents, but is also aimed at promoting traffic safety by linking premiums for traffic accident insurance with drivers’ performance. In fact, insurance companies operating in this sector will be required to see this as a separate business from other insurance endeavors. The principle for them will be no profit, no loss.”
According to the China Insurance Regulatory Commission, a fund will also be set up to pay, in advance, for the rescue and medical treatment of victims, even if the other side doesn’t have insurance covering them.
The fund authority will be able to reclaim money from those found responsible for accidents.
The regulator also says the commission will adjust its policies accordingly in the future. Drivers with good safety records will enjoy a preferential rate, while bad drivers will be liable for higher premiums.
Yixiu CRI news.
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