Up to 15 Million Won Liability for Drunk Driving Accidents... "0.4% Reduction in Insurance Premiums"

Financial Services Commission and Ministry of Land, Infrastructure and Transport Announce 'Automobile Insurance System Improvement Plan'

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] From now on, if a driver causes a drunk driving accident, the driver's automobile insurance accident deductible will increase up to five times. Insurance premiums for expensive imported cars with high repair costs will also rise.

On the 21st, according to the Financial Services Commission and the Ministry of Land, Infrastructure and Transport, a meeting on automobile insurance system improvement measures was held on the 19th, and such measures were prepared. The main point is to strengthen the driver's responsibility to prevent insurance fund leakage and induce a reduction in insurance premiums.

The government decided to raise the driver's accident deductible limit from 3 million KRW to 10 million KRW per accident in case of bodily injury accidents caused by drunk driving. For property damage accidents, the deductible limit per accident will increase from 1 million KRW to 5 million KRW. As the perpetrator's deductible increases, the insurance premiums paid by all subscribers will decrease. The government estimates that this will result in a 0.4% reduction in insurance premiums.

Similar to unlicensed driving, exemption clauses for insurance companies will apply to bodily injury II and property damage (over 20 million KRW) accidents caused by drunk driving and hit-and-run driving.

The surcharge for expensive cars with high repair costs will also be strengthened. This is to prevent the insurance premiums of general vehicles from rising due to covering the loss ratio of expensive vehicles with high repair costs. As of the first half of last year, the loss ratio for general vehicles was 78%, while the loss ratio for expensive vehicles was 91%. Accordingly, the government plans to subdivide the surcharge rate bracket for high repair cost vehicles (over 150%) and strengthen the surcharge rate from the current maximum of 15% to 23%.

In addition, minor violations unrelated to driving, such as failure to complete aptitude tests, unpaid fines, and failure to appear for summary trials, will be excluded from insurance premium surcharge items.

A personal deductible special contract for bodily injury and property damage will be introduced for motorcycles. Motorcycle drivers can choose their deductible (0 KRW, 300,000 KRW, or 500,000 KRW). Accordingly, they can receive some discount on insurance premiums and pay out-of-pocket for amounts below the deductible in case of an accident.

Measures to eliminate blind spots in automobile insurance coverage have also been introduced. First, the standard terms and conditions will be revised so that accidents occurring during carpooling for commuting purposes during commuting hours can be covered by personal automobile insurance. In preparation for the commercialization of autonomous vehicles, a compensation system for autonomous vehicle accidents will be established, and the development of insurance products dedicated to autonomous vehicles will be promoted.

Plans have also been prepared to recognize lost income from expected wages during military service in case of death from a traffic accident involving soldiers (those scheduled for military service), and to compensate for implant costs for teeth damaged in traffic accidents.

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