Driver Insurance Boom as Fines Rise: "Don't Switch Policies Without Careful Consideration"

On the 14th, at Cheonggu Elementary School in Jung-gu, Seoul, children are receiving education on safely crossing the crosswalk during the "School Zone Traffic Accident Zero Campaign" hosted by the Korea Road Traffic Authority. Photo by Moon Honam munonam@

[Asia Economy, reporter Oh Hyungil] It has been one month since the implementation of the "Minshik Law," which strengthens penalties for drivers involved in traffic accidents within child protection zones (school zones). Insurance companies are unexpectedly benefiting from this situation. As fines have been increased, more drivers are choosing to cover these fines with insurance payouts or switch to new insurance products.

However, consumers who are already enrolled in driver insurance may incur financial losses if they switch to a new policy. Financial experts advise that individuals should carefully review the details of their current insurance before making a decision.

According to the insurance industry on April 25, DB Insurance, KB Insurance, Hyundai Marine & Fire Insurance, Samsung Fire & Marine Insurance, Meritz Fire & Marine Insurance, and Hanwha General Insurance sold approximately 546,000 driver insurance policies from the beginning of this month through the 21st. This represents a 75% increase compared to the total of 312,000 policies sold last month.

Insurance companies have expanded the coverage of driver insurance in line with the implementation of the Minshik Law.

KB Insurance launched a new driver insurance product called "KB Driver Insurance and Stories of Living Safely." This product is the first in the industry to expand coverage for automobile accident fines up to 30 million won, and it also features a "Pay-Back" function that refunds the insurance premium if the policyholder is injured in a car accident. As a result, it achieved a record-breaking sales milestone of 100,000 policies within just 12 business days of its launch.

DB Insurance's "Very Good Driver Insurance" also sold a total of 160,000 policies from the 1st to the 21st of this month following the launch of new coverage options. The sales amounted to 3.6 billion won. In response to the recent implementation of the Minshik Law and the trend of expanding and strengthening the scope of criminal settlements, DB Insurance has added coverage for criminal settlements involving minor injuries requiring less than six weeks of treatment to its driver insurance.

Since the implementation of the Minshik Law, there has been growing interest in driver insurance, as the likelihood of facing severe penalties even for minor accidents has increased.

According to the revised Act on the Aggravated Punishment of Specific Crimes, if a child under the age of 13 dies in a child protection zone due to a driver's negligence, the driver faces life imprisonment or a prison term of up to three years. If the victim is injured, the driver faces imprisonment for at least one year and up to 15 years, or a fine of at least 5 million won and up to 30 million won.

Driver insurance generally provides coverage for traffic accident settlement support, fines, and attorney fees. While mandatory auto insurance covers civil liabilities such as bodily injury and property damage, driver insurance is not compulsory, and therefore, there is no obligation to purchase it.

In particular, existing driver insurance policyholders have already paid premiums that include significant business expenses. If they cancel their current contracts and enroll in new driver insurance policies, they may end up paying these business expenses twice.

Additionally, some point out that the effectiveness of driver insurance is limited, as cases where the maximum fine coverage is paid out are extremely rare. Last year, the payout rate for the maximum fine coverage by major non-life insurers was only 0.05%.

An insurance industry official stated, "As the criteria for punishment have become stricter with the implementation of the Minshik Law, consumers are now more aware and interested in driver insurance than before," and advised, "It is important to compare and analyze the coverage details to choose the product that best suits your needs."

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