Autonomous Car Insurance to Launch by End of This Month... Insurers to Provide Advance Compensation

Insurance Premiums for Autonomous Vehicles Used for Work
3.7% Higher Than Current Commercial Vehicle Insurance Rates

[Asia Economy Reporter Ki Ha-young] From the end of this month, insurance that can cover accidents during autonomous driving will be introduced. Starting with autonomous vehicles for business use, insurance for personal autonomous vehicles will be considered for development next year, taking into account market trends.

According to the industry on the 19th, the Financial Services Commission recently announced that 12 non-life insurance companies will begin selling special contracts exclusively for business-use autonomous vehicles from the end of this month. This follows the establishment of safety standards for autonomous vehicles by the Ministry of Land, Infrastructure and Transport and amendments to the Motor Vehicle Liability Insurance Act, which provide a legal basis for the commercialization of Level 3 autonomous vehicles starting in October.

Level 3 autonomous vehicles are cars that drive autonomously under specific conditions such as highways, where the driver takes control if the system requests intervention.

The new product will first be introduced as a special contract for business-use autonomous vehicles (commercial vehicles). Insurance for personal autonomous vehicles will be developed next year, considering the launch trends of personal autonomous vehicles.

Insurance premiums will be operated at a level 3.7% higher than current business-use vehicle insurance premiums, reflecting new risks such as system defects and hacking. Currently, there are no statistics for calculating autonomous vehicle rates, but premiums will be adjusted as related statistics accumulate.

The terms and conditions specify that if an accident occurs due to a defect in autonomous driving mode, the insurance company will provide advance compensation and then seek reimbursement from the vehicle manufacturer. Additionally, the policy includes the vehicle owner's obligation to cooperate in accident cause investigations.

This insurance covers cases where the autonomous driving system malfunctions causing the vehicle to operate differently from its original function, accidents caused by remote access or intrusion into the autonomous driving system, and cases where legal liability for damages is recognized as non-existent by court rulings regarding autonomous driving mode accidents. No premium surcharges will be applied the following year for no-fault accidents involving the operator.

The Financial Services Commission stated, "This autonomous vehicle-specific insurance product was developed to respond to the technological advancements of the Fourth Industrial Revolution and to clarify compensation relationships in the event of autonomous vehicle accidents." According to the Financial Services Commission, there are currently about 100 autonomous vehicles operating in South Korea, mostly owned by corporations or local governments and used on specific roads or sections.