Purpose of Providing Social Safety Net for Marginalized Groups
104 Local Governments Enroll in Citizen Safety Insurance
Lack of Promotion Raises Effectiveness Concerns
[Asia Economy Reporter Ki Ha-young]#. Mr. A, a resident of Suwon, fractured the palm of his left hand after slipping on a hillside near a spring at Paldal Mountain in April last year. After receiving treatment at a hospital, Mr. A filed a claim with the citizen safety insurance subscribed to by Suwon City and received 450,000 KRW in insurance benefits within a month. He also claimed benefits from his personal accident insurance, receiving overlapping coverage.
#. Mr. B, a resident of Daejeon, broke his clavicle after falling at Hanbat Arboretum in Seo-gu in mid-last month. After hospital treatment, Mr. B received 2 million KRW in medical expenses on the 3rd by utilizing the citizen safety insurance subscribed to by Daejeon City.
Local governments are increasingly subscribing to citizen safety insurance, which provides a minimum safety net against unexpected natural disasters and accidents. Although the local government subscribes to the insurance on behalf of individuals, there are criticisms that the system is ineffective due to lack of promotion.
According to the insurance industry on the 12th, Seoul City started implementing 'Citizen Safety Insurance' this year, which pays up to 10 million KRW in insurance benefits from NH Nonghyup Property & Casualty Insurance, contracted with the city, to citizens who suffer damage from natural disasters, fires, collapses, and other safety accidents. Last year, Incheon City and Daegu City were the first metropolitan cities to introduce citizen safety insurance. According to the General Insurance Association, as of 2018, 104 out of 226 local governments nationwide operate citizen safety insurance.
Citizen safety insurance is a system where local governments directly contract with insurance companies to guarantee citizen safety. Although details vary by local government, it covers damages in cases of death or permanent disability caused by natural disasters, accidents, public transportation accidents, robberies, and more. Since the local government contracts with the insurance company on behalf of citizens, no separate subscription procedure is required. The insurance premium is fully paid by the local government. For example, in Seoul, anyone registered as a resident in the city is automatically enrolled. Coverage can overlap even if the individual has personal insurance.
However, insurance claims must be filed directly by the affected citizens to the insurance company. Even if the local government has subscribed to citizen safety insurance, citizens cannot receive benefits unless they apply for insurance claims.
Since last year, there have been beneficiaries of insurance payments. Incheon City paid 163 million KRW in insurance benefits through citizen safety insurance over the past year. This included 7 deaths due to fire (70 million KRW), 2 cases of permanent disability due to fire (7 million KRW), 5 deaths during public transportation use (50 million KRW), and 5 cases of permanent disability during public transportation use (16 million KRW).
Local governments have introduced citizen safety insurance with the aim of providing a basic social safety net for marginalized and low-income groups. Recently, the coverage scope has been expanding beyond fires and disasters to include injuries. Suwon City was the first nationwide last year to introduce 'support for medical expenses due to accidents.' It provides actual expense compensation up to 500,000 KRW even for simple accidents and supports insurance benefits for accidents occurring on facilities managed by Suwon City such as roads, parks, and buildings. Because of this, some express concerns that citizen safety insurance could be abused.
Controversy over effectiveness due to lack of promotion continues. The fact that such an insurance system exists is not well known, so the number of insurance claims filed so far is not high. An industry official said, "The number of local governments subscribing to citizen safety insurance has been increasing in recent years and is expected to spread further. It is a useful system for citizens, but since many people are unaware of it, promotion must be strengthened for the system to take root."
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