Court Awards CNY 5,713 in Traffic Accident Property Damage Claim
In a recent civil judgment, a court in Eastern China City ordered an insurance company to compensate a vehicle owner for property damage resulting from a multi-vehicle collision. The plaintiff, Mr. Chen, sought recovery of repair costs, towing fees, and parking charges totaling CNY 5,713. The court held that the insurer must pay the full amount within the compulsory third-party liability insurance limit, rejecting the insurer’s argument for sub-limits.
The case arose from a traffic accident on April 30, 2011. Mr. Ren, an employee of Eastern China City-based Hongda Textile Co., Ltd. (the defendant company), was driving a company vehicle. At an intersection, Mr. Ren’s car collided with an unlicensed electric tricycle driven by Mr. Du, then struck Mr. Chen’s light truck, which was stopped at a red light. The accident caused injuries to Mr. Du and two passengers, and damaged all three vehicles. The traffic police determined Mr. Ren bore primary fault, Mr. Du secondary fault, and Mr. Chen no fault. The defendant company’s vehicle was insured under a compulsory motor vehicle liability insurance policy with the co-defendant insurance company, with a coverage limit of CNY 122,000.
During the court hearing, both defendants appeared through legal representatives. The defendant company acknowledged the accident facts and liability, and did not dispute the claimed amounts for repairs, towing, and parking. The insurance company also accepted the accident facts but argued that compensation should be limited to sub-limits within the policy (e.g., separate caps for property damage). The insurance company further contended that parking fees were not covered and that litigation costs should be excluded. The plaintiff submitted evidence including the traffic accident report, repair invoices, towing receipts, parking fee receipts, and an insurance loss assessment sheet.
The court examined the evidence and found the following facts: Mr. Chen’s vehicle sustained repairs costing CNY 4,973, towing expenses of CNY 550, and parking fees of CNY 190, totaling CNY 5,713. The court noted that the defendant company’s employee, Mr. Ren, was acting within the scope of employment at the time of the accident. The compulsory insurance policy was in effect. The court then applied the relevant legal provisions.
According to the law, where a motor vehicle accident causes property damage, the insurer must compensate within the compulsory third-party liability insurance limit. The court emphasized that the insurance company’s request to apply sub-limits (e.g., separate caps for property damage, medical expenses, and death/disability) was not supported by the applicable law. The court cited Article 19 and Article 48 of the Tort Liability Law, and Article 76 of the Road Traffic Safety Law. Accordingly, the court ruled that the insurance company must pay the entire CNY 5,713 to Mr. Chen within ten days of the judgment taking effect, and the defendant company was ordered to bear the reduced court fee of CNY 25.
This case illustrates the principle that compulsory motor vehicle insurance in China is designed to provide prompt and full compensation to innocent third parties for property damage, without allowing insurers to break down the coverage into sub-limits unless explicitly permitted by statute. For practitioners and litigants, the ruling reaffirms that courts will generally enforce the aggregate liability limit of the compulsory policy and reject attempts to cap payouts by category. The decision also highlights that employers can be held vicariously liable for employee negligence during work hours, though here the insurer bore the direct liability.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.