Court Upholds Victim Compensation: Insurance Company Must Pay Full Medical Costs in RMB 79,413 Traffic Accident Case

Court Upholds Victim Compensation: Insurance Company Must Pay Full Medical Costs in RMB 79,413 Traffic Accident Case

CASE OVERVIEW
A Northern China appellate court upheld a lower court judgment requiring an insurance company to compensate a traffic accident victim for all medical expenses, including non-reimbursable drugs under insurance policies. The total award amounted to RMB 79,413.12, with the insurer liable for RMB 77,548.12. The case clarified that insurers cannot deny coverage for non-medical insurance drugs under compulsory auto insurance.

CASE BACKGROUND AND FACTS
On September 7, 2009, at approximately 6:40 AM, Mr. Fang was driving a sedan along a road in Eastern China when he collided with an electric bicycle operated by Ms. Zhang. The accident caused personal injury to Ms. Zhang and damage to her bicycle. Ms. Zhang sustained injuries requiring hospitalization and was later diagnosed with a Level 10 disability following a forensic evaluation. Her total losses included medical expenses of RMB 14,143.92, lost wages of RMB 9,036, nursing care costs of RMB 1,807.20, transportation costs of RMB 300, hospitalization meal subsidies of RMB 360, appraisal fees of RMB 1,600, disability compensation of RMB 49,222, emotional distress damages of RMB 2,000, vehicle repair costs of RMB 579, towing fees of RMB 100, parking fees of RMB 165, and assessment fees of RMB 100.

The vehicle involved was insured with a compulsory traffic accident liability insurance policy and a commercial third-party liability policy with a limit of RMB 300,000, effective from May 3, 2009 to May 2, 2010. Ms. Zhang had resided in a property she purchased in Eastern China since June 2007 and obtained the property certificate in January 2010.

COURT PROCEEDINGS AND EVIDENCE
The original trial court in Eastern China entered judgment on December 2010, ordering the insurance company to pay RMB 77,548.12 and Mr. Fang to pay RMB 1,865. The insurance company appealed, arguing that the trial court erred by not deducting RMB 2,251.29 for non-medical insurance drugs from the medical expenses. The insurer claimed these drugs fell outside the scope of coverage under the insurance policy terms.

Mr. Fang responded that compulsory insurance should protect victims rights, and all medications prescribed by the hospital were reasonable and lawful. Ms. Zhang did not submit a defense on appeal. Neither party presented new evidence during the appellate proceedings.

COURT FINDINGS AND JUDGMENT
The appellate court found the facts identical to those determined in the original trial. The court held that the legislative purpose of compulsory traffic accident liability insurance is to provide basic protection for accident victims. Under the Road Traffic Safety Law, insurers have an obligation to compensate victims for personal injury and property losses within policy limits.

The court ruled that victims are entitled to claim compensation for reasonable medical expenses within the medical expense coverage limit, regardless of whether those expenses involve drugs covered by medical insurance. The insurance companys contractual clause excluding non-medical insurance drugs from coverage cannot override the victims statutory right to claim compensation from the insurer.

The court concluded that the insurers appeal lacked merit and affirmed the original judgment in its entirety. The appellate court ordered the insurer to pay the RMB 50 appeal fee.

KEY LEGAL PRINCIPLES
The case established that under Chinese law, compulsory auto insurance serves a social protection function. Insurers must fulfill their statutory duty to compensate victims for reasonable medical expenses without applying internal policy exclusions for non-medical insurance drugs. Contractual limitations that conflict with statutory protections are unenforceable against third-party victims.

PRACTICAL INSIGHTS
This ruling offers important guidance for accident victims and their legal representatives. Victims should assert their right to full medical expense reimbursement under compulsory insurance, even if some medications fall outside standard medical insurance formularies. Insurance companies cannot use policy fine print to reduce their statutory liability. Legal counsel should cite this precedent when insurers attempt to deduct non-medical insurance drug costs from compensation awards.

LEGAL REFERENCES
Civil Procedure Law of the Peoples Republic of China (2007 Revision), Article 153, Paragraph 1, Item 1.
Road Traffic Safety Law of the Peoples Republic of China, Article 76.
Insurance Law of the Peoples Republic of China, Article 65.

DISCLAIMER
This article is for informational purposes only and does not constitute legal advice. Laws and regulations may vary by jurisdiction. Readers should consult a qualified attorney for advice regarding their specific circumstances.