12.54 Million Drivers Enroll in 'Minsik Law' Auto Insurance... Financial Authorities Advise Caution in Enrollment

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[Asia Economy Reporter Oh Hyung-gil] Since the so-called 'Min-sik Law,' which strengthens penalties for traffic accidents in school zones, came into effect in March, the number of driver insurance subscriptions has recently surged.

The financial authorities have issued a consumer advisory as cases have arisen where new driver insurance policies are being sold, claiming that consumers need to subscribe to them to increase the coverage limits for fines.

According to the Financial Supervisory Service on the 18th, sales of driver insurance have surged since April due to the strengthened penalties for traffic accidents in school zones.

Looking at the monthly sales of driver insurance, there were 830,000 cases in April alone, which is 2.4 times the average monthly sales in the first quarter. As of the end of April, the total number of driver insurance subscriptions is approaching 12.54 million.

Since March 25, under the amended Act on the Aggravated Punishment of Specific Crimes, if a child dies due to a driver's negligence in a school zone, the driver faces life imprisonment or imprisonment of three years or more. If a child is injured, the penalty is imprisonment from one to fifteen years or a fine ranging from 5 million to 30 million KRW.

Insurance companies are releasing new products that increase coverage limits for fines and criminal settlement payments or add new coverage in line with the legal amendments.

The financial authorities warned that some agents or General Agencies (GA) are encouraging existing policyholders to subscribe additionally or to cancel their existing driver insurance, raising concerns about incomplete sales practices, and advised consumers to make careful choices.

In particular, special contracts that cover actual damages such as fines, criminal settlement payments, and attorney fees do not pay overlapping insurance benefits even if subscribed to more than twice; only proportional compensation for actual costs is provided, so subscribing to one is sufficient.

Also, if the coverage limit for fines in an existing driver insurance policy is low and you want to increase it, you can add a special contract to raise the limit. It is advisable to check whether special contracts are offered and the level of additional premiums by each insurance company.

Furthermore, driver insurance products that include maturity refunds contain savings premiums unrelated to coverage, making the premiums typically more than twice as expensive, so if you only want coverage in case of an accident, it is better to choose a pure coverage-type product without savings premiums.

Driver insurance covers fines and criminal settlement payments arising from death or serious injury of victims due to car accidents and violations of major traffic regulations, but it does not cover accidents caused by hit-and-run, unlicensed driving, or drunk driving, so caution is required.

A financial authority official advised, "If you cancel an existing contract and subscribe to a new one to expand coverage, unnecessary losses may occur, so you should carefully compare and choose."

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