The exorbitant repair costs of high-end luxury cars, often reaching hundreds of thousands of yuan, have left ordinary car owners and insurance companies alike crying out that they cannot afford the compensation. Zhang Jianhui / CFP "Accord collides with Rolls-Royce, facing a million-yuan claim," "Mitsubishi Lancer crashes into Rolls-Royce Phantom." A string of recent accidents involving luxury cars has prompted many netizens to lament, "There's a kind of overnight poverty called hitting a luxury car." The astronomical repair costs of high-end luxury cars leave ordinary car owners and insurance companies struggling to cover the damages. So, as an ordinary car owner, how should one purchase insurance to avoid being financially ruined in the event of a collision with a high-end luxury car?
A: Power of Third-Party Liability Insurance
Manager Lin from Pacific Property Insurance explained, "In luxury car accidents, if you, as an ordinary car owner, are determined by the traffic police to be primarily at fault, you will be responsible for compensation. Since mandatory traffic insurance (compulsory insurance) offers relatively low compensation limits for third-party property damage and medical expenses, if you haven't purchased third-party liability insurance for your vehicle, the amount of compensation you would need to cover could be quite shocking."
"To avoid greater losses, we recommend that clients purchase third-party liability insurance. This is a type of commercial insurance with generally higher compensation amounts, providing another layer of protection beyond the compulsory insurance," Manager Lin introduced. The insured amount can be negotiated between the policyholder and the insurer when signing the insurance contract, ranging from 50,000 yuan, 100,000 yuan, 200,000 yuan, 500,000 yuan, 1,000,000 yuan, up to no more than 10 million yuan.
It is understood that after the "Rolls-Royce accident sky-high claim case" spread, more and more customers began purchasing third-party liability insurance, favoring the 500,000 yuan level. However, insurance ultimately covers accidents, so ordinary car owners should keep a safe distance from luxury cars whenever possible. In case of misfortune where their own car collides with a luxury car, they should immediately report it to the police to clarify responsibility. Generally, car accidents are determined as single-party main responsibility, but sometimes responsibilities may also be divided into "three-seven" or "four-six" ratios. Owners should explain the situation in detail to the traffic police to minimize their losses.
B: Best to Purchase No Deductible Third-Party Liability Insurance
According to regulations, the benchmark premium for third-party liability insurance for family cars with less than six seats isn't mandatory. For example, the premium difference between a 300,000 yuan and a 500,000 yuan third-party liability insurance policy is only a few hundred yuan, not an outrageous increase, but the coverage significantly increases. Some citizens asked, does purchasing third-party liability insurance guarantee complete security? The answer is no.
"If you haven't purchased the no-deductible option for your third-party liability insurance, you might still have to pay a relatively high compensation fee if your car gets into an accident with a luxury car," warned a senior insurance industry insider from Jiangmen. She suggested that car owners should ideally choose the no-deductible option when purchasing third-party liability insurance. In this way, once an accident occurs and the compensation limit isn't exceeded, all compensation fees will be covered by the insurance company within the insured amount. If the owner hasn't purchased this option and an accident occurs, the insurance company will have a 20% no-deductible rate. For instance, if you've purchased a 200,000 yuan third-party liability insurance without the no-deductible option, the insurance company will only cover 160,000 yuan of the compensation, leaving the owner to bear 20%, which is 40,000 yuan.
C: Hard for Luxury Cars to Buy "Vehicle Damage Insurance"?
During interviews, journalists learned that due to the high repair costs of luxury cars worth millions of yuan, many insurance companies in our city impose restrictions on these high-end luxury cars purchasing "vehicle damage insurance." However, this doesn't mean that high-end luxury cars must drive uninsured. Apart from the necessary compulsory insurance, high-end luxury car owners can also purchase third-party liability insurance, preferably choosing the 1,000,000 yuan level to ensure adequate coverage. This way, if a high-end luxury car gets into an accident and the main responsibility is determined to be on their side, it won't cause too much financial loss.
A car insurance business manager from an insurance company in Jiangmen frankly admitted, "High-end luxury car insurance business isn't very popular. Due to the expensive price of high-end luxury cars, they bring significant compensation risks to insurance companies, so most insurance companies are unwilling to underwrite 'vehicle damage insurance' for luxury cars." However, he still recommended that high-end luxury car owners purchase high-limit third-party liability insurance to strengthen their protection.
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Luxury Car Insurance Likely to Emerge
Currently, China's auto insurance industry is still in its developmental stage, with lagging legal supervision and insufficient internal self-discipline within the industry. Whether it's the recent Accord collision with a luxury car incident or the school bus accident earlier, both reveal existing loopholes in China's auto insurance system. China has become a major automobile country, and the proportion of auto insurance premiums in property insurance is unusually high worldwide.
An internal source from an insurance company revealed to PhoenixNet Auto, "When luxury cars or rare cars come to purchase insurance, we carefully consider whether to underwrite. If we accept the business, the insurance company will raise the insurance rate." It is understood that when luxury cars and rare cars enter repair shops, there are often no corresponding spare parts available, and these cars cannot arbitrarily use other parts either. Therefore, manufacturers need to mail original equipment components from abroad before repairs can proceed, which is costly and consumes a large amount of manpower and resources from the insurance company.
Regarding the "luxury car safety insurance" mentioned by consumers, after consulting insurance industry insiders, the reply was, "Currently, there are no specific safety insurance products for luxury cars in the insurance company's auto insurance business." However, the person indicated, "New insurance regulations may be released in the first half of this year, with more comprehensive rights protection."
Foreign "Iron Laws" Protect Car Owners' Interests
In countries like Canada with well-established and developed auto insurance systems, once an accident occurs, "unconditional compensation" and "unconditional repairs" are "iron laws," but full compensation comes at a cost - the insured's premium for the following year will significantly increase.
Many insurance company executives stated that after the luxury car collision incidents, many car owners increased their third-party liability insurance coverage. However, the highest compensation amount for current third-party liability insurance is merely 500,000 yuan. With more luxury cars on the road today, if an accident occurs and isn't as "lucky" as the Accord owner's case, but instead causes serious damage requiring repair costs of 1,000,000 yuan or even 2,000,000 yuan, this meager 500,000 yuan premium is far from sufficient.
Industry insiders introduced that in countries like Canada with well-established and developed auto insurance systems, car insurance is mandatory. Once an accident occurs, "unconditional compensation" and "unconditional repairs" are "iron laws."
"That means, the compulsion of compulsory traffic insurance requires that policyholders must first insure before driving; otherwise, it's considered a violation. On the other hand, it forces insurance companies to fully compensate without being affected by factors such as traffic responsibility ratio. This double compulsion ensures that every car on the road is fully insured. Once an accident happens, regardless of who's responsible, there will be no issue of no one paying. This prevents situations where poorer parties in similar accidents face heavy burdens and are unable to compensate."