Some drivers have experienced minor accidents， like being sideswiped by a Porsche in a traffic jam or having their cars hit in parking lots without surveillance. Fortunately， in the latter case， dashcam footage from the “Sentry Mode” helped identify the culprit and prevent them from escaping.
A particularly bizarre incident involved one of our colleagues in the post-production department. Their car was parked properly when a ride-hailing vehicle behind them directly reversed into its front bumper. While the ride-hailing driver was clearly at fault， something peculiar happened next.
When the traffic police arrived， they discovered an issue with the offending vehicle’s insurance. The ride-hailing driver insisted they had purchased commercial insurance， but a check by the police revealed this was not the case.
For those who don’t drive or are unfamiliar with car insurance， it’s important to understand the basics. There are two main types of car insurance: compulsory traffic accident liability insurance (交强险) and commercial insurance. The compulsory insurance is mandatory for all vehicles on the road， offering relatively low premiums but a limited payout of up to ¥2，000 for repairs. Commercial insurance， on the other hand， is optional， comes with higher premiums， but provides comprehensive coverage with payouts potentially reaching ¥1-2 million.
Upon investigation， it was revealed that the ride-hailing driver had purchased what is known as “pooled vehicle insurance” (统筹“车险”)， a deceptive scheme that is alarmingly common among ride-hailing drivers.
The reason for this prevalence lies in the cost. Unlike private vehicles， ride-hailing services are classified as commercial operations， requiring specialized ” परिचालन بیم” (营运险). For an identical vehicle model， commercial insurance premiums can be ¥3，000-¥5，000 annually for private use， while commercial use can jump to ¥10，000 or more. Pooled insurance， however， offers premiums significantly lower than official commercial insurance， often comparable to private car insurance rates.
However， pooled “vehicle insurance” is not actual insurance. When an accident occurs， it often leads to non-payment or underpayment of claims. A quick search on major social media platforms reveals numerous instances of drivers being defrauded after purchasing this type of coverage.
This issue is not new. As early as 2022， the Insurance Association of China issued a risk warning regarding pooled insurance. Last year， various media outlets and regulatory bodies， from central to local levels， also highlighted the dangers associated with it.
Despite widespread awareness and repeated warnings， this seemingly deceitful practice persists， even operating with a degree of seeming legitimacy.
So， how did pooled insurance come about?
In the 1990s， when China’s car insurance system was still in its nascent stages， the transportation industry established a dedicated claims fund. Members contributed to this fund， and payouts were made from it to cover accident-related expenses. This form of industry mutual aid proved beneficial for truck drivers， who often operate large vehicles with higher inherent risks.
This mutual support mechanism helped drivers mitigate risks. Consequently， in 2012， the government issued a directive that explicitly “encouraged transportation enterprises to adopt forms such as traffic safety pooling.”
From then on， pooled insurance gained a form of legitimacy. Coupled with the persistent challenges in insuring large trucks， pooling became popular within the trucking industry.
The inherent risks in freight transportation， especially with large trucks， mean that accidents often result in substantial financial liabilities. Many insurance companies were hesitant to underwrite this segment due to the high claims frequency and severity.
For instance， PICC Property and Casualty Company， one of China’s largest property insurance providers， reported a claims ratio of around 75% for compulsory traffic insurance for commercial vehicles before 2020. While this was higher than for private cars by 10-20%， it was still marginally profitable. However， following the car insurance reforms in 2021， which increased compulsory insurance payout amounts， the claims ratio for commercial vehicles surged to an astonishing 99.7%. This meant that for every ¥7.45 billion in premium income in that year， ¥7.43 billion was paid out in claims， leaving almost no profit for the insurance company.
Indicating the profitability challenges， Zhong Weiping， Secretary-General of the Commercial Vehicle Professional Committee of the China Automobile流通 Association， revealed that fewer than six insurance companies in China were willing to underwrite commercial vehicles. This created a significant hurdle for freight truck drivers seeking insurance.
On the other hand， truck drivers faced considerable difficulties in obtaining insurance. Some drivers resorted to waiting at insurance company offices with all their documentation， demonstrating the lengths they had to go to secure coverage. This arduous process was understandably frustrating for many.
Clearly， pooled insurance emerged as a solution to address some of the pain points within the trucking industry due to its unique characteristics. As more drivers subscribed to these services， the number of pooled insurance companies also naturally increased， particularly in major transportation provinces like Hebei and Shandong.
While the logic of pooled insurance may appear similar to that of actual insurance， it fundamentally remains a private or informal arrangement and lacks the regulatory oversight of insurance. Consequently， its payout capacity is significantly inferior to that of legitimate insurance.
It’s crucial to remember that insurance companies operate under strict regulations. They are required to have substantial registered capital， maintain dedicated insurance reserves， and adhere to numerous provisions stipulated in the Insurance Law. These measures are in place to guarantee that policyholders receive their due compensation.
Pooled insurance providers， however， operate differently. They are typically registered as companies with a few tens of millions in registered capital. If the claims ratio becomes too high and the company’s finances are insufficient， business owners may simply dissolve the company and disappear， leaving policyholders with no recourse.
A quick check on platforms like Qichacha reveals that most pooled insurance companies are flagged for risks， ranging from abnormal operations to being listed as untrustworthy.
In recent years， with the surge in popularity of new energy vehicles， the insurance market for these vehicles is still evolving. This has led to challenges such as difficulty in obtaining insurance and inflated premium rates. Consequently， individuals who previously operated pooled insurance schemes for commercial vehicles have now shifted their focus to the new energy vehicle market.
Critically， the industry mutual aid model of pooled insurance， suitable for commercial vehicles， is fundamentally unsuitable for passenger cars.
On platforms like Black Cat Complaint (黑猫投诉)， numerous users have reported that pooled insurance providers often delay claim payouts for various reasons， citing issues with damage assessment， procedural approvals， or other excuses to avoid immediate payment.
Even when they do agree to pay， the process is often cumbersome and fraught with complications.
A repair shop owner， referred to as Brother Nan， expressed his strong dissatisfaction with pooled insurance due to their practice of aggressively undercutting repair costs. Brother Nan explained that while legitimate insurance companies typically approve the use of original manufacturer parts， pooled insurance providers rarely do. Instead， they often insist on aftermarket parts or refurbished components， a practice he believes can lead to future issues.
Furthermore， he noted the significantly slower payment processing times. While insurance payments are usually settled within a week， pooled insurance payments can take anywhere from half a month to several months. Consequently， Brother Nan has stopped accepting vehicles covered by pooled insurance.
This raises a crucial question: given the numerous pitfalls associated with pooled insurance， why do so many people continue to purchase it?
There are two primary reasons for this. Firstly， some individuals， like the ride-hailing driver in the incident， are simply lured by the lower cost. Many ride-hailing platforms only mandate compulsory traffic insurance， not commercial insurance.
However， the inherent risks associated with ride-hailing operations often make drivers concerned about the adequacy of compulsory insurance coverage. As official commercial insurance can be prohibitively expensive， they opt for pooled insurance as a perceived alternative.
Secondly， many people fall victim to deceptive sales tactics. Sales representatives misleadingly present pooled insurance as legitimate coverage， perhaps claiming to be an authorized third-party channel offering discounts. They might initially enroll the customer in a valid compulsory traffic insurance policy， but then surreptitiously replace the commercial insurance with pooled coverage. The documentation for pooled insurance often closely resembles official insurance policy papers， making it easy for unsuspecting individuals to be duped.
So， how can one avoid falling into this trap?
Legitimate insurance policies will always use terminology such as “insurance” (保险) and “premium” (保费). The policy header will typically read “XX Insurance Policy，” and personal information will be listed under “insured person.” The specific coverage categories will invariably include the word “insurance，” such as “Motor Vehicle Damage Insurance” or “Motor Vehicle Third-Party Liability Insurance.”
In contrast， pooled insurance providers often substitute terms like “protection” (保障) or “service” (服务) for “insurance，” attempting to create a similar impression.
We urge all vehicle owners to carefully review their insurance policies. If you discover that you have been misled into purchasing pooled insurance， do not delay – contact the sales representative or the company immediately.
This concludes our discussion on pooled insurance.
While pooled insurance may have served a purpose within the commercial vehicle sector， particularly for freight transportation， it is entirely unnecessary for private passenger vehicles. The commercial insurance market for private cars is mature and well-established， rendering pooled insurance a redundant and risky alternative.
We advise all drivers to exercise caution when purchasing car insurance， especially when presented with unusually low premiums. Always scrutinize the details and diligently avoid pooled insurance schemes.
