Geumsoyeon Files Joint Lawsuit for Refund of Car Insurance Deductibles

The Financial Consumers Federation announced on the 1st that it filed a "claim lawsuit for self-pay deductible compensation" against 104 automobile insurance subscribers and 13 non-life insurance companies at the Seoul Central District Court the previous day.

[Asia Economy Reporter Oh Hyung-gil] The Korea Financial Consumers Federation announced on the 1st that it filed a "claim lawsuit for compensation of self-pay deductible" against 104 automobile insurance policyholders and 13 non-life insurance companies at the Seoul Central District Court yesterday.

A deductible refers to the portion of the repair cost that a driver who has subscribed to the own vehicle damage special contract bears, ranging from 200,000 to 500,000 KRW, when their vehicle is damaged in an accident. The non-life insurance industry views the deductible for the own vehicle special contract as a measure introduced by regulatory authorities to prevent moral hazard such as intentional accidents, and therefore considers it non-refundable.

The Korea Financial Consumers Federation stated, "If the insurer has received subrogation payments, it is only right to refund the deductible borne by the consumer, but they have not paid it." They explained, "We proceeded with a joint lawsuit based on the Supreme Court ruling (2014Da46211) that 'in non-life insurance, the insurer can exercise subrogation rights only within the remaining amount after the consumer has been compensated first for the damages.'"

This joint lawsuit was selected as a project to support consumer rights enhancement by the Fair Trade Commission, and consumers participating in the lawsuit do not bear litigation costs. Additionally, the law firms Deoksu, Igong, and Manhae Legal Office participated as representatives in the joint lawsuit.