Next Month's Increase in Out-of-Pocket Expenses
Legislation to Promote Insurers' Subrogation Rights Also Underway
[Asia Economy Reporter Oh Hyung-gil] Measures to increase penalties for drunk driving are being promoted, mainly in the political sphere. This is due to the fact that the number of accidents, which had decreased after the enactment of the "Drunk Driving Penalty Enhancement Act" (commonly known as the Yoon Chang-ho Act) last year, has shown only a temporary effect and has started to rise sharply again this year.
With a bill proposed to make drivers bear the full cost of traffic accident damages, the deductible for automobile insurance in drunk driving accidents will also increase starting next month. As crackdowns are expected to intensify ahead of the Chuseok holiday, when drunk driving accidents tend to increase, consumers are urged to be cautious.
According to the insurance industry on the 29th, from the 22nd of next month, the deductible for compulsory insurance in drunk driving traffic accidents will be raised. Recently, the Financial Supervisory Service announced revisions to the insurance supervision rules, including amendments to the standard automobile insurance policy in line with the enforcement rules of the Automobile Damage Compensation Guarantee Act.
Until now, when a driver caused an accident while drunk driving, the driver only had to pay a maximum of 3 million KRW for Bodily Injury I (damage amount up to 150 million KRW based on death) and 1 million KRW for property damage as accident deductibles. The remaining damage costs were covered by the insurance company.
However, starting next month, the deductible for Bodily Injury I will increase to 10 million KRW, and for property damage to 5 million KRW. Additionally, for non-compulsory voluntary insurance such as Bodily Injury II (damage amount exceeding 150 million KRW based on death) and property damage (damage exceeding 20 million KRW), new accident deductibles of 100 million KRW and 50 million KRW respectively will be introduced.
For example, if a drunk driving accident results in one death with damages amounting to 400 million KRW, the driver previously paid only 3 million KRW, but going forward, the driver will have to pay 103 million KRW. If vehicle damage amounts to 80 million KRW, the driver's burden will increase from the previous 1 million KRW to 51 million KRW.
Beyond raising deductibles, legislation is also being promoted to allow insurance companies to seek full reimbursement from drivers involved in drunk driving, unlicensed driving, or hit-and-run accidents for the insurance payments made to victims. Assemblyman Han Jun-ho of the Democratic Party recently proposed an amendment to the Automobile Damage Compensation Guarantee Act containing these provisions. If this amendment passes the National Assembly, insurance companies will have the right to claim compensation from drunk drivers.
This move to strengthen drunk driving penalties comes as accidents, which had decreased due to the Yoon Chang-ho Act, are rising sharply again.
According to the Samsung Traffic Safety Culture Research Institute affiliated with Samsung Fire & Marine Insurance, from January to August this year, 4,627 drunk driving traffic accidents were reported to Samsung Fire & Marine Insurance, surpassing the total of 3,787 drunk driving accidents last year. During the same period, out of 130,654 license cancellations, those canceled due to drunk driving accounted for nearly half at 59,102 cases (45.2%).
An insurance industry official said, "The 'Yoon Chang-ho Act' strengthening drunk driving penalties was effective, but the enforcement was limited due to the novel coronavirus (COVID-19), which seems to have led to a relaxation of vigilance." He added, "From next month, if an accident occurs while driving under the influence, the perpetrator must fully compensate the victim's damages, so special caution is required."
Meanwhile, the police will collaborate with related agencies such as the Ministry of Land, Infrastructure and Transport, the Fire Agency, local governments, and the Korea Expressway Corporation to conduct traffic accident prevention activities during the Chuseok holiday. They urged compliance with basic traffic laws such as wearing seat belts and recommended taking breaks at drowsiness rest areas or service areas during long drives to ensure safe driving. In particular, they emphasized strict crackdowns on drunk driving and called for heightened caution.
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