[Becoming an Insurance Insider] You Can't Get an Expensive Hospital Room When Hospitalized for a Traffic Accident

How Will Auto Insurance Change in the New Year?

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[Asia Economy Reporter Oh Hyung-gil] Starting this year, new automobile insurance subscribers who are hospitalized due to traffic accidents will no longer be able to freely use expensive hospital rooms.

According to the insurance industry on the 2nd, unlike health insurance (where patient burden ranges from 30% to 100% depending on the hospital room grade), automobile insurance has so far paid the full hospitalization fee regardless of the hospital room grade.

Even if admitted to a higher-grade hospital room than the standard room, customers had no out-of-pocket expenses, causing a sharp increase in hospitalization fee payments. Payments for higher-grade hospital rooms increased about sevenfold from 1.5 billion KRW in 2016 to 11 billion KRW last year.

Accordingly, the authorities plan to set a ceiling on hospitalization fees for higher-grade rooms and revise the medical fee standards to ensure that hospitalization costs are paid reasonably.

Additionally, the burden of automobile insurance premiums is expected to decrease somewhat.

If a spouse registered as the main insured under the automobile insurance couple special contract subscribes to a separate insurance policy, the no-accident record of the existing insurance contract will be equally recognized (up to 3 years).

Previously, if a spouse with a no-accident driving record under the couple special contract separated their insurance, premiums suddenly increased. This was because the spouse covered by the husband's couple special contract could not have their no-accident record recognized when subscribing separately.

Furthermore, the system will be improved so that the government directly compensates for accidents caused by falling objects from vehicles. When driving on highways, if falling objects from the vehicle ahead cause an accident while trying to avoid them, victims had to bear medical and damage costs until now.

Driving distance information per driver will be collected by the Korea Insurance Development Institute and shared among insurance companies when drivers change insurers. This is expected to activate a system that discounts automobile insurance premiums based on actual driving distance.

[Image source=Yonhap News]

Compensation for automobile accident victims will be strengthened.

The method of calculating insurance payments (loss of earning capacity) for military personnel and those scheduled for military service who die or suffer permanent disabilities in car accidents will be improved from using military pay (about 530,000 KRW per month) to daily worker wages (about 2,820,000 KRW per month) during the military service period.

If a 19-year-old male dies in a traffic accident, the insurance payment for the expected service period (assumed 18 months) will increase from about 9.15 million KRW (present value of 18 months of military pay) to about 32.6 million KRW (present value of 18 months of daily worker wages after deducting living expenses).

Insurance payments for cases where the insured cannot work due to a traffic accident will also increase. Currently, automobile insurance loss of earning capacity is calculated using compound interest, but it will be revised to simple interest, consistent with other insurance payments.

From the subscriber's perspective, insurance payments will increase. The maximum insurance payment for an 11-year-old girl injured in a traffic accident is currently 290 million KRW but will increase to 450 million KRW.

Compensation standards for motorcycle riders' exclusive clothing have also been clarified. In motorcycle accidents, compensation will be provided up to 2 million KRW for integrated protective gear worn by the rider (including helmets and airbags). However, similar general clothing (such as rider leather jackets and pants) will be excluded from compensation to prevent excessive payouts.

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