Court Orders Full CNY 122,000 Insurance Payout Despite Plaintiff at Fault
A plaintiff who caused a traffic accident by rear-ending another vehicle successfully recovered the full compulsory insurance limit of CNY 122,000 from the defendant insurer, even though the plaintiff bore full responsibility for the collision. The court rejected the insurer’s argument that it only needed to pay the lower no-fault limit of CNY 12,100. The decision confirms that China’s compulsory motor vehicle insurance system provides victims with compensation regardless of their own fault, up to the statutory cap.
The accident occurred on June 19, 2010, in Eastern China City. The plaintiff, Mr. Zhang, was driving a medium-sized truck when he struck the rear of a medium-sized truck driven by Mr. Wang and owned by Eastern China City Plastic Co., Ltd. The traffic police determined that Mr. Zhang had failed to maintain a safe distance and assigned him full responsibility; Mr. Wang was found not at fault. Mr. Zhang suffered serious injuries including a left hip fracture with dislocation and a right distal tibiofibular fracture. He was hospitalized for 18 days and incurred medical expenses of CNY 47,671. The plaintiff later claimed total damages of CNY 133,783.60 from the insurer, Tianan Insurance Co., Ltd., and the other defendants. The insurer maintained that its liability should be capped at the no-fault limit of CNY 12,100.
At trial, Mr. Zhang submitted extensive evidence, including the accident certificate, medical records, invoices, a forensic opinion showing a permanent disability (10th grade), and a contract showing he worked as a truck driver under a vehicle management agreement. The insurer challenged only the non-medical expense items and argued that medical bills should exclude non-reimbursable drugs. Mr. Wang and the plastic company did not dispute the facts but refused to pay because they were not at fault. The court admitted all evidence, noting the forensic appraisal was jointly commissioned and procedurally proper.
The court found that under Article 76 of the Road Traffic Safety Law, the insurer must compensate the victim within the compulsory insurance limit of CNY 122,000, regardless of the insured driver’s fault. The court explicitly rejected the insurer’s argument that it should only pay the no-fault sub-limit of CNY 12,100, holding that such a reading undermines the legislative purpose of providing timely and effective relief to accident victims. The court then calculated the plaintiff’s losses: medical expenses CNY 47,671 (excluding a duplicate bill for CNY 4), hospitalization food subsidy CNY 270 (18 days at CNY 15 per day), nursing fees CNY 1,511.50, transportation costs CNY 200 (discretionary), and continued to consider the claimed lost income and disability damages.
The court’s legal reasoning emphasized that the compulsory third-party liability insurance system is designed to protect victims first, not to apportion fault. The insurer’s duty to pay arises from the mere occurrence of an accident involving the insured vehicle, not from the driver’s culpability. The court also noted that the insurer cannot deduct non-medical expenses or refuse to cover medical bills that are medically necessary, as the system aims to ensure full coverage of reasonable treatment costs. On the issue of lost income, although Mr. Zhang had retired earlier, the court observed he was still working and under 60 at the time of the accident, so he remained entitled to claim.
This case underscores a key principle of Chinese traffic accident litigation: the compulsory insurance cap of CNY 122,000 applies even when the insured driver is blameless, and the victim is fully at fault. Insurers cannot limit their exposure to the lower no-fault threshold. For victims, this means that basic medical and disability costs are recoverable from the insurer regardless of their own negligence, though excess losses beyond the cap must be pursued against the at-fault party. The ruling also clarifies that retirement does not automatically bar a claim for lost income if the plaintiff remains economically active.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.