Drivers across China will be forced to cough up around 1,000 yuan (US$125) for compulsory insurance before taking to the road next month.

The insurance regulator yesterday said vehicle liability insurance would become compulsory on July 1.

Rates will differ, depending on the vehicle and the driver's record. A family car with less than 6 seats should cost 1,050 yuan (US$131) every year, with claims limited to 60,000 yuan (US$7,500), including 50,000 yuan (US$6,250) for death or deformity, 8,000 yuan (US$1,000) for medical treatment and 2,000 yuan (US$250) for damage.

A book about the Regulation on Compulsory Traffic Accident Liability Insurance for Motor Vehicles. Drivers across China will be forced to cough up around 1,000 yuan (US$125) for the compulsory insurance before taking to the road next month. [newsphoto]

The China Insurance Regulatory Commission (CIRC), the industry regulator, said the Compulsory Liability Insurance Policy was designed to ensure victims of traffic accidents receive timely medical treatment and financial compensation.

"The policy is a little expensive for me," Liu Yang, who drives a Jetta car, told China Daily. He complained that his other car insurance last year already totalled 1,600 yuan (US$200).

"The coverage of 2,000 yuan (US$250) for potential damage is the main reason for such high premiums," said Hao Yansu, an insurance professor with the Central University of Finance and Economics.

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