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Insurance firms revise car accident penalties

July 11,2017
Drivers who are less at fault in a car accident will pay lower auto insurance premiums, a change from the current system that penalizes all parties equally, Korea’s financial regulator said Monday.

The change, which will go into effect in September, is aimed at adjusting the degree of balance between at-fault drivers and those who are less responsible for an accident after reporting the case to an insurance company to receive compensation.

Currently, if a driver is 80 percent responsible for an accident and the other driver is 20 percent at fault, their insurance rates will go up by the same rate.

From Sept. 1, a policyholder who is deemed as being less than 50 percent responsible for a car accident will pay lower premiums, the Financial Supervisory Service said in a statement Monday.

For instance, if a driver is 20 percent responsible for a car accident, under the current system, that driver’s car insurance rate jumps 34 percent to 550,000 won ($475).

Under the new system, that driver’s car insurance rate will rise just 10 percent to 450,000 won under the same conditions, the financial regulator said.

Kwon Soon-chan, deputy governor of insurance at the Financial Supervisory Service, said overall auto insurance premiums for victims will decline under the new system.

Car insurance premiums for about 150,000 victims are expected to fall by an average 12.2 percent, or 15.1 billion won, Kwon said.