Controversial Minsik Law... Driver Insurance Attracts 1 Million People in Two Months (Comprehensive)

Stricter Penalties Up to Life Imprisonment for School Zone Traffic Accidents
Driver Insurance Contracts Surpass 1 Million Since Law Enforcement
Controversy Expected Over Appropriateness of Punishments Under Minsik-i Law

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] Office worker Kim Hye-in (36, female) signed up for driver insurance alongside her younger sibling last month. This was because she heard that under the Minsik Law, if a traffic accident occurs in a school zone, the driver could face up to life imprisonment. Kim said, "I initially had no intention of subscribing to driver insurance since it is not mandatory, unlike car insurance," but added, "Even my father, who has over 30 years of driving experience, mentioned the Minsik Law and expressed concern about driving in school zones, so I decided to get driver insurance."

Since the enforcement of the so-called Minsik Law (Amendment to the Act on Aggravated Punishment of Specific Crimes), which significantly strengthens penalties for drivers involved in traffic accidents in school zones, the number of driver insurance subscribers has skyrocketed. As legal penalties for drivers have increased, consumer interest has grown due to concerns about accident occurrences. However, caution is required as insurance payouts related to fines are not duplicated even if multiple driver insurance policies are held.

According to the Financial Supervisory Service and the insurance industry on the 5th, it is estimated that the number of new driver insurance contracts has approached about 1.5 million from March 25, when the Minsik Law was enforced, until last month. In April alone, immediately after the law's enforcement, 829,000 new contracts were signed. This is 2.4 times the average monthly figure from January to March. The initial premiums paid by April subscribers reached 17.8 billion KRW.

A representative from Insurance Company A explained, "Inquiries about driver insurance surged immediately after the Minsik Law enforcement, and new contracts exploded from April," adding, "Compared to the same period last year, it increased by about two to three times." A representative from Insurance Company B said, "Although the rapid increase slowed somewhat in May, the number of driver insurance subscribers still doubled compared to the previous year, showing that interest in driver insurance remains strong."

Driver insurance is a product that covers criminal liabilities such as fines, traffic accident settlement payments, and attorney fees in the event of a traffic accident. However, unlike car insurance, which covers civil liabilities such as bodily injury and property damage compensation, it is not mandatory.

Despite not being mandatory, the explosive growth is attributed decisively to the enforcement of the Minsik Law. According to the Minsik Law, if a child dies due to driver negligence in a school zone, the driver faces life imprisonment or imprisonment of three years or more; if a child is injured, imprisonment from one to fifteen years or a fine ranging from 5 million to 30 million KRW is imposed. This naturally increases the burden on consumers in the event of an accident.

In response to consumer needs, insurance companies have expanded coverage and introduced various special contracts to attract customers.

DB Insurance introduced a special contract that pays 3 million KRW in traffic accident support funds even for injuries requiring less than six weeks of treatment. KB Insurance was the first in the industry to introduce a 'payback' feature that exempts future insurance premiums and refunds previously paid premiums if the insured suffers injuries classified between grades 1 and 7 due to a car accident. Earlier, Meritz Fire & Marine Insurance raised the coverage limit for fines in traffic accident support funds from 20 million to 30 million KRW starting in April. Samsung Fire & Marine Insurance and Hyundai Marine & Fire Insurance also plan to increase the legal cost support special contract coverage limit from 20 million to 30 million KRW starting next month.

With the surge in driver insurance sales, caution regarding duplicate subscriptions is also necessary. A Financial Supervisory Service official urged, "When subscribing to driver insurance, carefully compare whether there is duplication in coverage for fines and criminal settlement payments and whether coverage increases are possible before signing up."

Meanwhile, controversy over the future application of the Minsik Law is expected to continue. Recently, online criticism has emerged that the penalties for violating the Minsik Law are harsher compared to other crimes. The National Assembly Legislative Research Office also argued in a report titled 'Legal Issues and Tasks Related to Punishment and Prevention of Child Traffic Accidents in School Zones' released on the 4th that the appropriateness of the punishment level in the application process of the Minsik Law should be examined. The office stated, "There are criticisms that driver penalties for traffic accidents caused by negligence rather than intent are excessively severe," and "It is necessary to discuss whether the punishment level for traffic accidents caused by relatively minor driver negligence such as carelessness is appropriate." No actual cases applying the Minsik Law have yet emerged.