How does auto liability insurance compensate?

According to Decree 03/2021/ND-CP of the Prime Minister and Circular 04/2021 of the Ministry of Finance, automobile civil liability insurance is compulsory insurance. All automobiles on the road are required to purchase third-party automobile civil liability insurance at the mandatory level prescribed by the State.

If the competent authority checks and the car owner cannot present auto liability insurance, the car owner will have to pay a fine according to State regulations. At the same time, he/she must pay to buy additional insurance immediately.

The insurance company will pay for damage to the vehicle and body of a third party when participating in traffic. The third party here is the owner of another vehicle that is damaged or hit by an insured car.

Cases covered by insurance

When a car owner unintentionally or carelessly causes damage to the health, life and property of a third party while participating in traffic.

When the car owner drives a passenger vehicle causing damage to the life and health of passengers on the vehicle, when the vehicle unfortunately has an accident on the road.

Cases not covered by insurance

The driver or owner of the motor vehicle, or the victim, intentionally caused damage.

The driver who caused the accident intentionally fled and did not properly fulfill the civil responsibilities of the vehicle owner.

The driver is over the driving age or under the driving age as prescribed by the law on road traffic.

The driver did not have a driver's license or used an invalid driver's license.

Indirect damage includes: Damage associated with the use and exploitation of damaged assets, reduced commercial value.

When the driver causes an accident while his breath or engine contains alcohol, stimulants or is using drugs prohibited by law.

Causing damage to property stolen or lost in an accident

Damage to special assets such as: Gems, gold, silver, money, antiques, rare paintings, remains...

Insurance compensation level

In case the accident is entirely caused by the car owner or driver, the insurance company will compensate for health damage to the injured party according to the disability payment rate table specified in Appendix I issued under Decree 03/2021/ND-CP.

In case the accident is determined to be entirely the fault of the injured party, the insurance company will compensate for damage to the health and body of the injured party in an amount equal to 50% of the prescribed level.