Supreme Court: "If Motorcycle Special Clause Was Not Explained, Accident Insurance Payment Must Be Made"

[Asia Economy Reporter Oh Hyung-gil] The Supreme Court has ruled that even if the insurance policyholder did not disclose the fact of motorcycle driving, the insurer must pay the insurance benefits if it failed to properly explain the clause allowing the contract to be rejected.

The Supreme Court's First Division (Presiding Justice Kim Seon-su) announced on the 9th that it upheld the lower court's ruling in favor of the plaintiff in the appeal case where policyholder A sued Meritz Fire & Marine Insurance for insurance benefits.

In May 2015, A entered into a life insurance contract with Meritz Fire & Marine Insurance for his son. The following year, A's son died in a traffic accident while riding a motorcycle on a rainy road.

Meritz Fire & Marine Insurance refused to pay the insurance benefits and demanded cancellation of the insurance contract, claiming that A's son did not disclose the fact that he regularly rode a motorcycle. The insurance terms included a clause allowing the insurer to reject the contract for motorcycle riders.

In response, A filed a lawsuit against the insurer demanding payment of 550 million won in insurance benefits.

The first trial ruled in favor of A. The court stated, "It is difficult to conclude that the insurance contract recruiter fully explained the clause that the insurance contract could be rejected in relation to motorcycle operation." The appellate court also judged, "Even if A violated the duty to disclose the fact of motorcycle driving, the insurance contract cannot be canceled as the insurance contract recruiter did not fulfill the obligation to explain the related matters."

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