[Insurance Insider] Driver's Insurance... "Worrying Whether to Join, Worrying Even After Joining"

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[Asia Economy Reporter Oh Hyung-gil] "Is it automobile insurance or driver insurance, that is the question!"

With the enactment of the so-called 'Minsik Law,' the number of people subscribing to driver insurance is increasing. Why do people need to subscribe additionally even though they already have automobile insurance?

Driver insurance is considered the top hit product in the non-life insurance industry in the first half of this year. Due to concerns that the fines, criminal settlement amounts, and lawyer fees limits may be insufficient under the Minsik Law, more drivers are seeking compensation coverage, increasing its popularity.

The Minsik Law stipulates severe penalties: life imprisonment or imprisonment of three years or more for causing a child's death in a school zone, and imprisonment from one year to 15 years or a fine of up to 30 million KRW for injury. There are limits to coverage under automobile insurance.

Right after the law was enacted in April, the number of new driver insurance sales by domestic non-life insurers reached 830,000 cases. This is 2.4 times the average monthly sales in the previous quarter (January to March).

Automobile insurance is insurance for the vehicle (property) that covers compensation for damages and civil liabilities in case of traffic accidents. All vehicle owners are required to subscribe, and failure to do so results in a fine of up to 900,000 KRW.

On the other hand, driver insurance is insurance for the driver (person) that covers criminal and administrative liabilities arising from 12 major negligent accidents or traffic accidents that automobile insurance cannot cover. Driver insurance is optional, not mandatory.

Driver insurance covers injuries to the driver, criminal liabilities, and damages related to the 12 major negligent accidents.

When an accident occurs due to speeding in a child protection zone, driver insurance can cover lawyer fees and settlement amounts related to criminal and administrative liabilities.

However, even without separately subscribing to driver insurance, there is a way to get coverage through automobile insurance.

When subscribing to automobile insurance, adding a legal expense rider can compensate for burdens related to criminal liabilities. The advantage is that it is cheaper than subscribing separately to both automobile and driver insurance, but the disadvantage is that compensation under this rider is only available when the insured driver drives the insured vehicle.

If you subscribe separately to driver insurance, you can receive broader coverage even if the contents are the same as the rider added to automobile insurance. For example, if you drive your parents' car or a rental car during a trip, you need to have driver insurance separately to receive benefits.

However, fines, criminal settlement amounts, and lawyer fees are not paid redundantly even if you subscribe to two or more driver insurance policies. Only the actual costs are proportionally compensated. Therefore, there is no need to subscribe to multiple products; choosing one good product is sufficient.

Non-life insurance experts advise that when subscribing to driver insurance, to minimize criminal liability costs that automobile insurance cannot cover, pay attention to three major items: traffic accident handling support funds, lawyer fees, and automobile accident fines.

A non-life insurance company official said, "The traffic accident handling support fund rider supports criminal settlements by providing settlement funds, and recently the coverage limit has increased from 30 million KRW to 100 million KRW," adding, "You should decide whether to subscribe by comparing the coverage period and premiums of your existing insurance with the premiums and main coverage of new products."