Local Government-Led Policy Insurance... 'Effectiveness' Controversy
Coverage Including Accident Support Funds with Premiums Around 10,000 Won
On the 20th, when the weather was fully autumnal, citizens who visited Mangwon Hangang Park in Seoul enjoyed riding bicycles. Photo by Yoon Dong-joo dso7@
[Asia Economy Reporter Oh Hyung-gil] DB Insurance has become the first in the industry to launch an insurance policy that covers accidents occurring while individuals ride bicycles for hobbies or commuting.
Until now, only residents of certain areas could subscribe to bicycle insurance through support from some local governments, but from now on, anyone can subscribe to the insurance regardless of their location.
According to the insurance industry on the 30th, DB Insurance recently launched a policy that covers support funds for bicycle accident settlements. This insurance is characterized by providing 30 million KRW in accident settlement support funds (criminal settlement money) and 20 million KRW in fines for bodily injury accidents in cases of victim death, serious injury, or criminal settlements due to serious legal violations occurring during bicycle operation.
Additionally, it supports treatment for injuries that may occur from bicycle accidents, including 10 million KRW for bicycle injury death, 10 million KRW for 80% disability due to injury, 2 million KRW for diagnosis of fractures in five major areas such as head, neck, and waist, 2 million KRW for injury surgeries of types 1 to 5, 1 million KRW for injury surgery costs, 500,000 KRW for fracture diagnosis, and 500,000 KRW for cast treatment. The premium for a 30-year-old male is in the 10,000 KRW range per month for a 20-year payment and 20-year term.
While the main coverage is similar to bicycle insurance previously subscribed through local governments, it differs in that individuals can subscribe directly.
Non-life insurance companies have been reluctant to launch dedicated bicycle insurance due to the frequent occurrence of bicycle accidents and the complexity of calculating loss ratios. In particular, bicycles are not subject to mandatory insurance under the Road Traffic Act, so accidents often lead to civil lawsuits.
Accordingly, since Changwon City in Gyeongsangnam-do first introduced public bicycles and subscribed to bicycle insurance in 2008, most local governments have paid hundreds of millions of KRW annually for policy insurance. However, there has been criticism that many local residents were unaware of their insurance subscription status and thus could not receive coverage, reducing the effectiveness.
Damage from bicycle traffic accidents has been rapidly increasing recently. According to the Road Traffic Authority, there were 13,157 bicycle-related traffic accidents last year, a 10.2% increase from the previous year. The number of deaths reached 178, and injuries totaled 13,648.
The insurance industry is paying attention to whether DB Insurance can follow the success of driver insurance by introducing bicycle insurance. DB Insurance first launched driver insurance in the industry in 1984 and has since led the popularization of driver insurance.
A DB Insurance official said, "With the era of 13 million bicycle users, social demand for compensation for accident damages is increasing, which led us to introduce this related insurance product."
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