"No Forgiveness for Drunk Drivers"... Accident Liability Increased to 10 Million Won

Announcement of Measures to Improve the Automobile Insurance System

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] In the future, if a drunk driver causes a traffic accident, the accident burden fee for personal injury accidents will increase from the current 3 million KRW to 10 million KRW. The exemption system currently applied to unlicensed driving will also be applied to drunk driving and hit-and-run accidents.

For vehicles with relatively high repair costs, automobile insurance premiums will be surcharged. It is expected that the loss ratio of automobile insurance, which is the cause of premium increases, can be improved.

On the 19th, the Financial Services Commission and the Ministry of Land, Infrastructure and Transport announced a plan to improve the automobile insurance system containing these details.

The government will first revise the Enforcement Rules of the Automobile Damage Compensation Guarantee Act within the second half of the year so that drivers involved in drunk driving accidents bear up to 15 million KRW in accident handling costs.

Currently, in the case of drunk driving accidents, non-life insurance companies compensate the victims and then claim the accident burden fee from the drunk driver up to 3 million KRW for personal injury accidents and 1 million KRW for property damage accidents (per accident).

The annual insurance payout for drunk driving accidents amounts to about 330 billion KRW, with an average payout per case of 10 million KRW for personal injury and 4.26 million KRW for property damage.

However, there have been criticisms that the low level of accident burden fees limits their effectiveness as economic sanctions and deterrents.

Kim Sang-seok, Director of Automobile Management at the Ministry of Land, Infrastructure and Transport, said, "If insurance payouts due to drunk driving accidents decrease, it will help suppress or reduce premium increases for general policyholders," adding, "We will also actively consider a plan to claim the full amount of insurance payouts caused by drunk driving accidents from the driver."

The government will also expand the insurance exemption system applied to unlicensed driving accidents to include drunk driving and hit-and-run accidents. Currently, in the case of unlicensed driving, insurance companies do not cover compensation exceeding 150 million KRW for personal injury type 2 and 20 million KRW for property damage.

In the future, insurance companies will not be required to cover compensation exceeding 150 million KRW for personal injury type 2 and 20 million KRW for property damage not only for unlicensed driving but also for drunk driving and hit-and-run driving.

For two-wheeled vehicle insurance such as motorcycles, a personal injury and property damage deductible special contract will be introduced. If subscribed, it is expected that insurance premiums can be reduced. If subscribing to a deductible special contract of 500,000 KRW, premiums are expected to decrease by 15% compared to the current rates.

For short-term subscribers with automobile insurance periods of less than one year, the same short-term premium rate table will be applied regardless of the number of vehicles owned.

Additionally, the government will improve standards to recognize the expected income during military service for active-duty soldiers or those who have not yet served as lost earnings of the victim in the event of a traffic accident. There have been criticisms that when soldiers or those scheduled for military service die in traffic accidents, the military service period is excluded from the calculation of lost earnings, which is unreasonable.

Meanwhile, the government plans to prepare detailed review standards for medical expenses paid through automobile insurance by May. When medical institutions claim payments from insurance companies for automobile insurance medical expenses, the Health Insurance Review and Assessment Service, commissioned by the insurance companies, reviews the appropriateness of the claimed medical expenses on a case-by-case basis.

However, since reviews have been conducted on a case-by-case basis without clear standards, inconsistencies in individual review results for similar cases have occurred.

This content was produced with the assistance of AI translation services.