One Year Since Min-sik Law Enforcement... 75% Increase in Driver Insurance Enrollment

Four Major Non-Life Insurers
Driver Insurance Subscriptions Surge Over 1 Year
However, Claims Decrease by 7.5% Due to COVID-19

[Asia Economy Reporter Ki Ha-young] Since the enforcement of the so-called 'Minsik-i Act' (Revised Road Traffic Act and Act on the Aggravated Punishment of Specific Crimes) aimed at strengthening safety in school zones last year, the number of driver insurance subscriptions has surged.

According to the insurance industry on the 2nd, from April last year when the Minsik-i Act was fully implemented until February this year, the number of driver insurance subscriptions at major non-life insurance companies (Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance) totaled 3,871,105, marking a 75.1% increase compared to 2,210,207 during the same period the previous year. This surge is analyzed to be due to consumers' concerns about accidents as the legal penalties for drivers have become more severe.

In particular, DB Insurance showed remarkable growth. In April last year, DB Insurance's Chamjoheun Driver Insurance obtained exclusive rights for coverage of criminal settlements related to minor injuries from accidents lasting less than six weeks, resulting in nearly double the number of subscriptions within a year. The expansion of criminal settlement targets due to the enforcement of the Minsik-i Act is believed to have driven the popularity of related special contracts.

Driver insurance is a product that covers criminal liabilities such as fines imposed in the event of a traffic accident, settlement payments, and attorney fees. Unlike automobile insurance, which covers civil liabilities such as bodily injury and property damage compensation, driver insurance is not mandatory. Despite not being compulsory, the explosive growth is attributed decisively to the enforcement of the Minsik-i Act.

However, the actual number of claims for compensation under driver insurance has decreased. During the same period, the number of claims for automobile accident fines under driver insurance was 9,840, about 7.5% less than the previous year's 9,103. This is analyzed to be due to a reduction in traffic accidents as social distancing measures were strengthened amid the COVID-19 pandemic.

An industry official said, "Although the explosive increase seen last year has not continued, demand for driver insurance remains steady," adding, "Customers are subscribing to driver insurance linked with automobile insurance to prepare for criminal liabilities at a relatively low premium of 10,000 to 20,000 KRW."

Meanwhile, the Minsik-i Act, which came into effect on March 25 last year, stipulates that if a child under 12 years old 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 includes imprisonment from one year to 15 years or a fine ranging from 5 million to 30 million KRW. With the strengthened penalties, the number of traffic accidents in school zones also decreased last year. According to the Ministry of the Interior and Safety, 478 traffic accidents occurred in school zones last year, a 15.7% decrease from 567 the previous year. The number of fatalities during the same period also dropped from six to three.

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