[2020 Financial Services Commission Work Plan] Increasing Self-Payment for Drunk Driving Accidents Next Month

[Asia Economy Reporter Oh Hyung-gil] The government will raise the self-pay amount for drunk driving accident offenders next month. Additionally, insurance premium surcharges will be increased for vehicles with high repair costs.

According to the 2020 business plan announced by the Financial Services Commission on the 19th, the FSC plans to prepare a comprehensive improvement plan for the automobile insurance system in cooperation with the Ministry of Land, Infrastructure and Transport by the first quarter of this year.

First, the self-pay amount for drunk drivers will be increased. Currently, drunk driving accident offenders must pay a maximum self-pay amount of 4 million KRW (3 million KRW for bodily injury, 1 million KRW for property damage). It has been pointed out that the economic burden on offenders is not significant compared to the severity of accidents caused by drunk driving.

Accordingly, the government is reportedly considering various measures to raise the self-pay amount up to 10 million KRW for bodily injury and 5 million KRW for property damage. The non-life insurance industry expects that raising the self-pay amount to 10 million KRW for bodily injury and 5 million KRW for property damage could prevent an annual insurance payout leakage of 55 billion KRW.

Insurance premium surcharges for vehicles with high repair costs will also be strengthened, and a self-pay special contract will be introduced for motorcycles, which previously did not receive insurance coverage. This allows policyholders to choose self-pay amounts of 0 KRW, 300,000 KRW, or 500,000 KRW and receive premium discounts in exchange for bearing part of the costs out-of-pocket in case of an accident.

Furthermore, regarding the underpayment issue arising from the exclusion of military service periods in calculating lost income when soldiers die in traffic accidents under the current standard automobile insurance terms, the compensation standards for bodily injury will be improved.

In preparation for the commercialization of autonomous vehicles, the development of insurance products tailored for autonomous vehicles will also be promoted.

For indemnity health insurance, which has seen a sharp increase in loss ratios, improvement measures will be prepared within the first half of the year. A premium differentiation system based on medical usage will be introduced, and the scope of coverage and self-pay rates will be rationalized. The inconvenient insurance claim procedures will also be improved to enhance consumer convenience.