Get sufficient third‑party liability coverage: the mandatory insurance limits are uniform nationwide and relatively low, so any excess must be paid out of your own pocket

Commercial third‑party liability insurance costs a few hundred to a few thousand yuan per year. The higher the coverage amount you choose, the cheaper the premium becomes per unit of coverage.

Nationwide, mandatory insurance enforces uniform liability limits. These limits are calculated separately for four categories: death or disability, medical costs, property damage, and compensation payable when you’re not at fault. Following the 2020 overhaul of auto insurance, the total maximum payout is now 200,000 yuan, broken down as 180,000 yuan for death/disability, 18,000 yuan for medical costs, and 2,000 yuan for property damage. When you’re not liable, the limits drop to 18,000 yuan for death/disability, 1,800 yuan for medical costs, and 100 yuan for property damage. Any amount above these caps must be borne by the responsible party; drivers lacking mandatory coverage face vehicle impoundment and a fine equal to twice the unpaid premium.

国务院 (2006, 2012 修订). 机动车交通事故责任强制保险条例（国务院令第 462 号，第 618 号令修改）第二十三条：「机动车交通事故责任强制保险在全国范围内实行统一的责任限额。责任限额分为死亡伤残赔偿限额、医疗费用赔偿限额、财产损失赔偿限额以及被保险人在道路交通事故中无责任的赔偿限额。」「责任限额由保监会会同国务院公安部门、国务院卫生主管部门、国务院农业主管部门规定。」第二十一条限额内赔偿；第三十九条未投保的「由公安机关交通管理部门扣留机动车……处依照规定投保最低责任限额应缴纳的保险费的2倍罚款」. http://www.gov.cn/gongbao/content/2012/content_2131962.htm；中国银行保险监督管理委员会 (2020). 关于实施车险综合改革的指导意见（银保监发〔2020〕41 号，四（四）：「将交强险总责任限额从12.2万元提高到20万元，其中死亡伤残赔偿限额从11万元提高到18万元，医疗费用赔偿限额从1万元提高到1.8万元，财产损失赔偿限额维持0.2万元不变」）. https://www.gov.cn/gongbao/content/2020/content_5567758.htm（国务院公报）

These limits are set by financial regulators and may be adjusted over time. The figures cited reflect current values after the September 2020 reforms; it’s advisable to verify them before purchasing a policy. Crucially, mandatory insurance pays out per category separately — unused portions cannot be applied toward other categories. Compensation claims often surpass these caps, leaving drivers personally liable for the remainder. While this guide does not prescribe an exact coverage amount, it highlights how a modest additional outlay can safeguard you against a scenario with low probability yet potentially devastating financial impact.