20.1 Introduction

In 2019, the total number of motor vehicles insured reached 260 million in China, and premium income was US$818.9 billion, accounting for 63% of property insurance premiums.1 Motor vehicle insurance in China is categorized into two basic classes: compulsory motor vehicle third-party liability insurance and non-compulsory commercial insurance. According to the Road Traffic Safety Law of China, a scheme of compulsory motor vehicle third-party liability insurance (hereinafter, compulsory motor vehicle insurance) is applied nationwide in China.2 The owners or managers of the motor vehicles driven on the roads within China are obliged to purchase compulsory motor vehicle insurance policies under which the insured and the drivers permitted by the insured to use the vehicle are covered against liability to pay damages for death or personal injury or property loss to the third-party victims caused by or arising from the use of the vehicle.3