[Asia Economy Reporter Oh Hyung-gil] Starting next month, the accident burden for drivers at fault in accidents caused by drunk driving or hit-and-run will increase up to 154 million KRW under automobile insurance. Currently, the accident burden for drivers at fault in drunk driving or hit-and-run accidents is up to 4 million KRW.
The Financial Supervisory Service announced on the 27th that it will implement a revision of the "Standard Automobile Insurance Policy" strengthening the deductible for drunk driving and hit-and-run drivers starting from the 1st of next month.
The revised standard policy includes raising the voluntary automobile insurance deductible that drivers must bear for accidents caused by drunk driving or hit-and-run to 100 million KRW for bodily injury II and 50 million KRW for property damage (for damages exceeding 20 million KRW).
Including the compulsory insurance deductible (4 million KRW), the accident burden for the at-fault driver can increase up to 154 million KRW.
Automobile insurance is divided into compulsory insurance (bodily injury and property damage I), which must be purchased, and voluntary insurance (bodily injury and property damage II), which is optional.
Compulsory insurance covers liability for injuring or killing others in a car accident or for compensation related to such damages. Since the coverage amount is insufficient with only compulsory insurance, most drivers tend to purchase voluntary insurance as well.
In the event of a drunk driving or hit-and-run accident, the insurance company first pays the victim and then claims reimbursement from the at-fault driver. However, the reimbursement amount is limited to the compulsory insurance coverage. In other words, by paying a deductible of 4 million KRW (up to 3 million KRW for bodily injury and 1 million KRW for property damage), the at-fault driver is exempt from civil liability.
Assuming a drunk driving or hit-and-run accident results in one death with damages of 400 million KRW, the current burden on the at-fault driver is 3 million KRW. The remaining 397 million KRW is
borne by the insurance company. With the revised policy, the at-fault driver's burden will increase to 103 million KRW. Also, if vehicle damage of 80 million KRW occurs, the at-fault driver's burden will increase from the current 1 million KRW to 51 million KRW.
A Financial Supervisory Service official explained, "The policy was revised because insurance payments for drunk driving and hit-and-run accidents caused the insurance premium burden to be passed on to good-faith insurance consumers."
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