DB Insurance Secures Nine-Month Exclusive Usage Right for "Korean Lemon Law" Coverage

DB Insurance announced on September 24 that it has obtained a nine-month exclusive usage right for its newly launched "Legal Fee Coverage for Automobile Exchange·Refund Arbitration," which was introduced on August 12.

The New Product Review Committee of the General Insurance Association granted DB Insurance a nine-month exclusive usage right for its "Legal Fee Coverage for Automobile Exchange·Refund Arbitration," recognizing its originality and usefulness as it was the first product of its kind developed by the company.

This new coverage from DB Insurance guarantees attorney fees incurred when utilizing the "Automobile Exchange·Refund Arbitration System (Korean Lemon Law)," which has been enforced since January 2019 following amendments to the Automobile Management Act. The Automobile Exchange·Refund Arbitration System allows consumers to request an exchange or refund from the manufacturer if repeated defects occur within one year of purchasing a new car (or within 20,000 kilometers). In case of disputes with the manufacturer, the issue is resolved through arbitration rather than a court trial, with the decision made by the Arbitration Panel of the Ministry of Land, Infrastructure and Transport's Automobile Safety Defect Review Committee.

The automobile exchange·refund arbitration process carries the same legal effect as a final court ruling, making it crucial for consumers to respond effectively during the proceedings. Since manufacturers often participate in arbitration with legal representation, it is important for consumers to have practical support to respond accordingly. DB Insurance explained that its new coverage helps mitigate information asymmetry by covering attorney fees, thereby enabling consumers to exercise their rights more reasonably.

Until now, driver insurance has contributed to easing consumers' legal burdens by covering attorney fees for civil and criminal lawsuits. The new coverage is evaluated as significantly expanding the scope of legal support available to consumers by extending protection to arbitration procedures. As a result, the function of existing legal fee coverage is broadened, and consumers' time and financial burdens are expected to be further reduced.

A DB Insurance representative stated, "The new coverage carries significant social value by helping consumers utilize public systems," adding, "By supporting legal costs, we expect to enhance the effectiveness of the exchange·refund arbitration system and contribute to the protection of consumer rights."

Meanwhile, DB Insurance continues to expand the scope of its driver insurance to address various risks that may occur while driving. The company has been the first in the industry to introduce several coverages, such as property damage fines and additional payouts for accidents involving vehicles equipped with advanced safety devices in 2018, support for traffic accidents requiring less than six weeks of treatment in 2020, expanded attorney fee coverage for police investigations in 2022, and post-driving non-occupant accident coverage in 2024, consecutively obtaining exclusive usage rights.

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