Record Heavy Rain Causes 16 Billion KRW Vehicle Flood Damage... Auto Insurance Loss Ratio 'Setback'

1585 Vehicle Flood Damage Cases at 4 Non-Life Insurers
Own Car Coverage Compensation... Loss Amount Expected to Increase

[Image source=Yonhap News]

[Asia Economy Reporter Oh Hyung-gil] Record-breaking heavy rain exceeding 80mm per hour poured down in Busan, causing significant damage nationwide due to concentrated heavy rain. The insurance industry is also concerned that the loss ratio of automobile insurance will inevitably worsen as the number of vehicles flooded by suddenly rising water increases.

According to the General Insurance Association on the 28th, from the 9th to 9 a.m. on the 27th, the number of vehicle damage claims caused by heavy rain reported to four companies including Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, KB Insurance, and DB Insurance reached 1,620 cases. Among these, vehicle flooding accounted for 1,585 cases, with an estimated damage amount of 16.12 billion KRW, representing the majority of vehicle damage.

By region, 1,478 cases of vehicle flooding occurred in Busan and Gyeongsang Province, with damages amounting to 15.339 billion KRW, the highest nationwide.

Seoul, Incheon, and Gyeonggi followed with 44 cases of vehicle flooding and damages of 312 million KRW. Gwangju and Jeolla recorded 27 cases, while Daejeon, Chungcheong, Gangneung, and Gangwon each recorded 18 cases.

Under the current automobile insurance, flooded vehicles are compensated under the own-damage coverage. Drivers can confirm flood damage and claim insurance benefits from their subscribed insurance company.

Compensation is possible whether water enters the vehicle while passing through a flooded area or if the vehicle is parked and flooded due to typhoons or floods. Regardless of illegal parking, flooding during parking caused by natural disasters is treated as a no-fault accident under own-damage coverage and is excluded from premium surcharges. However, if the vehicle is driven into an already flooded area and gets flooded, surcharges may apply depending on the driver's fault and damage amount, so caution is advised.

However, compensation is not provided if rainwater enters through open car windows or sunroofs. Items left inside the vehicle are also not covered.

Additionally, if a vehicle is completely damaged by flooding and a new vehicle is purchased, acquisition and registration taxes can be reduced. The automobile total loss certificate issued by the General Insurance Association can be obtained from the insurance company and attached when registering the vehicle at the vehicle registration office. This applies when the damaged vehicle is scrapped and a new vehicle is acquired or when the insurance company takes over the damaged vehicle according to the total loss certificate.

An insurance company official explained, "If the car stops or is parked in water, do not start the engine or touch other devices; it should be towed." He added, "Starting the engine when water has entered the engine can cause water to enter surrounding engine components, leading to friction and severe damage to the engine."

Meanwhile, the general insurance industry expects the automobile insurance loss ratio, which had been stable this year, to rise again due to this flood damage. In July 2011, flood damage amounting to about 40 billion KRW caused the automobile insurance loss ratio to increase by about 4 percentage points that month.

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