Low accident data may delay loss ratio estimation
Accident cases and injured persons increase by 95% annually on average
On the 13th, a citizen wearing no protective gear was riding an electric scooter weaving through cars on the Namsan Circular Road in Seoul. Photo by Dongju Yoon doso7@
[Asia Economy Reporter Oh Hyung-gil] Jeong-sik Han (pseudonym, 29), who purchased an electric kickboard for commuting ahead of summer, recently fell and fractured his leg while riding the kickboard on the road. After receiving treatment at the hospital, he filed a claim for indemnity medical insurance benefits with his insurer, but the insurance company refused to pay. He was also notified that his insurance contract would be terminated if he continued to use the kickboard. The insurer explained that he violated the duty of disclosure by not informing them about his kickboard usage.
He expressed frustration, saying, "When I signed up for the insurance, no one asked about my intention to purchase a kickboard or explained anything. Are users supposed to bear the full brunt of damages if an accident occurs?"
As the use of personal mobility devices (PMDs) such as electric kickboards increases ahead of summer, related accidents are also surging. However, there are few ways to receive compensation for damages caused by such accidents. Currently, insurance coverage for PMD accidents is rare, leading to an increase in cases where victims receive no compensation.
The government and the insurance industry have begun discussions to introduce insurance for kickboard users, but property and casualty insurers are reluctant. They cite the lack of sufficient data to calculate loss ratios and the recent sharp rise in accidents, which would inevitably lead to high premiums if insurance products were launched.
According to the insurance industry on the 30th, kickboards are classified under the Road Traffic Act as "motorized bicycles," which fall under two-wheeled motor vehicles like motorcycles. If a kickboard is used continuously rather than temporarily, users must notify their insurance company.
Insurers may cancel contracts or refuse to pay claims if the insured fails to fulfill the notification obligation, and premiums may be increased. Even if users notify insurers about kickboard usage, it is still difficult to receive compensation for damages caused by kickboard accidents.
Only Group Insurance for Kickboard Sharing Service Companies
Recently, traffic accidents involving personal mobility devices (PMDs), including kickboards, have surged.
According to the Road Traffic Authority, there were 789 traffic accidents caused by PMDs over the past three years, resulting in 835 injuries and 16 deaths. The number of accidents and injuries increased by more than 95% annually on average, and the death toll doubled in just two years.
In particular, starting this December, amendments to the Road Traffic Act and the Bicycle Use Promotion Act will allow kickboard use without a motorized vehicle license and permit their use on bicycle lanes. The number of kickboard users is expected to continue rising, raising concerns about a corresponding increase in accidents.
However, kickboards currently remain in an insurance coverage blind spot.
Although kickboards are a type of vehicle, they are not subject to the Automobile Liability Security Act, which governs automobile accident liability and compensation. This is because the Automobile Management Act Enforcement Rules exclude vehicles with a maximum speed of 25 km/h or less from registration requirements. Therefore, compensation through automobile insurance is not available.
There are no insurance products available for individuals using kickboards. Only some kickboard sharing service companies have purchased group insurance.
The Ministry of Land, Infrastructure and Transport, property and casualty insurers, and related companies have started discussions to introduce insurance for shared kickboards, and voices calling for mandatory kickboard insurance have emerged. However, the insurance industry feels that launching dedicated insurance products is not easy.
An insurance industry official explained, "There is no consensus on whether kickboards should be considered automobiles requiring mandatory insurance or bicycles, and calculating loss ratios is also difficult. Rather than mandating individual insurance enrollment, a more realistic approach is to provide coverage through group insurance similar to municipal bicycle insurance."
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