Drivers in China face new rules on compulsory insurance premiums for their cars that took effect yesterday.

 

Premiums will be linked to drivers' accident records, so those who caused a fatal traffic accident in the previous year must pay up to 30 percent more for their coverage.

 

And drivers who are involved in more than two non-fatal accidents must pay 10 percent more, said China Insurance Regulatory Commission, the country's top insurance regulator.

 

Good drivers, however, will enjoy discounts of between 10 and 30 percent, according to the number of years of safe driving.

 

The nationwide premium for family car owners is 1,050 yuan (US$137) annually. Shanghai drivers with good records pay a minimum of 735 yuan while others pay up to 1,785 yuan.

 

After public consultation, the CIRC dropped a draft plan to also link drivers' premiums with their records of traffic infringements, such as running red lights or speeding.

 

Draft rules issued on June 15 suggested the CIRC might link premiums to driving records, but it received 684 e-mails and 19 fax messages complaining about the plans.

 

Critics said linking premiums to traffic infringements would make it much harder to get a discount.

 

For instance, one draft rule said drivers could have lower insurance rates only if they had not broken any traffic laws in the previous year.

 

Many drivers complained that meeting the discount requirement was almost "mission impossible" as traffic police are sometimes inclined to hide and trap drivers.

 

New drivers can also unwittingly break traffic laws if they drive in unfamiliar streets, drivers complained.

 

"After hearing views from the various sides, the watchdog decided to make rules in line with most drivers' opinion," said Yuan Li, spokesperson for CIRC.

 

June 21, the regulator held a media briefing to hear views from their driving readers, and held a conference on June 25 to hear opinions from lawyers, professors, statisticians, insurance and traffic experts on the draft.

 

The regulator made two major revisions to its final version. One was to link discounts to accident records rather than traffic fines, making it easier for drivers to earn lower rates.

 

It also expanded the maximum discount for good drivers with no accident records in the previous three years from 20 percent to 30 percent, to encourage more safe driving.

 

For drivers with no accident records in the previous two years, they will get a discount of 20 percent, increased from a previous draft of 15 percent.

 

Drivers responsible for at least two accidents will pay 10 percent extra, instead of a planned 15 percent.

 

China launched compulsory vehicle insurance on July 1, 2006, forcing owners of the country's more than 130 million cars, motorcycles and tractors to buy insurance policies.

 

The CIRC said the first year's scheme would charge a flat rate, with floating premium rates being introduced in the second year.

 

The policy on motor insurance complemented a traffic law that took effect in 2004, requiring that drivers must compensate for deaths, injuries and damages caused in accidents, unless there is evidence that the other party caused the accident on purpose.

 

(Shanghai Daily July 2, 2007)