Road Traffic Accident Leads to 18,800 Yuan Claim in Eastern China: Court Orders Insurer and Driver to Pay

Road Traffic Accident Leads to 18,800 Yuan Claim in Eastern China: Court Orders Insurer and Driver to Pay

CASE OVERVIEW

A civil dispute over property damage from a road traffic accident resulted in a judgment ordering an insurance company to pay 11,600 yuan in vehicle repair and towing costs, and the at-fault driver to pay 4,320 yuan in lost operating income. The total claim was 18,800 yuan. The case was heard by the People’s Court in Eastern China.

CASE BACKGROUND AND FACTS

On October 23, 2010, Mr. Lu was driving a vehicle he owned in Eastern China. He collided with the rear of a taxi owned by Mr. Li. The traffic police determined that Mr. Lu was fully responsible for the accident. Mr. Lu’s vehicle was insured under a compulsory motor vehicle liability insurance policy with Dazhong Insurance Company, Zhejiang Branch. Mr. Li sought compensation for vehicle repair costs of 11,400 yuan, lost operating income of 7,200 yuan for 12 days, and towing fees of 200 yuan, for a total of 18,800 yuan.

COURT PROCEEDINGS AND EVIDENCE

The court admitted the following evidence submitted by Mr. Li: the accident determination letter, a vehicle damage assessment report from the insurer, photographs of the damage, a repair invoice for 11,400 yuan, a parts and materials list, the vehicle registration certificate, the at-fault driver’s vehicle information, a repair shop certificate confirming a 12-day repair period, and a towing service invoice for 200 yuan.

Mr. Lu argued that the repair time was excessive and the claimed lost income was too high. Dazhong Insurance challenged the reasonableness of the repair costs, noting that a post-repair inspection was required but not performed. The insurer also argued that lost operating income was an indirect loss not covered by compulsory insurance. The insurer did not object to the towing fee.

The court found no evidence to support the objections raised by Mr. Lu and Dazhong Insurance. The damage assessment report was issued by the insurer itself, and Mr. Li paid the repair costs. The repair shop certificate and towing invoice were also accepted as credible evidence.

COURT FINDINGS AND JUDGMENT

The court held that under Article 76 of the Road Traffic Safety Law, the insurer must pay compensation within the compulsory insurance liability limit of 122,000 yuan for at-fault accidents. Since the total of 11,600 yuan for repairs and towing did not exceed this limit, Dazhong Insurance was ordered to pay this amount.

Regarding the lost operating income claim, the court applied a Supreme People’s Court批复 (reply) on whether property losses include lost income from damaged vehicles used for commercial passenger transport. The court found Mr. Li’s taxi was a commercial vehicle and that he was entitled to compensation for lost income during the repair period. However, the evidence only showed a daily turnover of 600 yuan without deducting operating costs. The court calculated the net loss at 360 yuan per day, resulting in 4,320 yuan for 12 days. Mr. Lu was ordered to pay this amount.

The court dismissed the remainder of Mr. Li’s claim. Court costs of 135 yuan were apportioned, with Mr. Li paying 21 yuan and Mr. Lu paying 114 yuan.

KEY LEGAL PRINCIPLES

The insurer’s liability under compulsory motor vehicle insurance is limited to direct property damage and does not cover indirect losses such as lost operating income. The at-fault driver is personally liable for such indirect losses. Lost operating income for commercial vehicles is recoverable, but the claimant must provide evidence of net profit, not just gross revenue.

PRACTICAL INSIGHTS

This case illustrates that commercial vehicle owners should maintain detailed records of daily income and operating expenses to support claims for lost income. Insurance companies will not cover indirect losses, so claimants must pursue those directly against the at-fault driver. Prompt documentation of damages and repair timelines is essential.

LEGAL REFERENCES

Road Traffic Safety Law of the People’s Republic of China (2007), Article 76, Paragraph 1.
General Principles of the Civil Law of the People’s Republic of China, Article 106, Paragraph 1.
Supreme People’s Court Reply on Whether Property Losses in Road Traffic Accidents Include Lost Operating Income of Damaged Vehicles.

DISCLAIMER

This article is for informational purposes only and does not constitute legal advice. Readers should consult a qualified attorney for advice on specific legal matters.