Four Major Non-Life Insurers
Driver Insurance Subscriptions Surge Over One Year
However, Claims Decrease by 7.5% Due to COVID-19 Impact
[Asia Economy Reporter Ki Ha-young] Since the enforcement of the so-called 'Minsik-i Act' (Revised Road Traffic Act and Act on the Aggravated Punishment of Specific Crimes) aimed at strengthening safety in school zones last year, the number of driver insurance subscriptions has surged.
According to the insurance industry on the 2nd, from April last year when the Minsik-i Act was fully implemented until February this year, the number of driver insurance subscriptions at major non-life insurance companies (Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, KB Insurance) totaled 3,871,105, marking a 75.1% increase compared to 2,210,207 during the same period the previous year. This surge is analyzed to be due to consumers' concerns about accidents as the legal penalties for drivers have become more severe.
In particular, DB Insurance showed remarkable growth. After DB Insurance's Chamjoheun Driver Insurance obtained exclusive usage rights for coverage of criminal settlements related to minor injuries from accidents under six weeks in April last year, the number of subscriptions nearly doubled within a year. The expansion of criminal settlement targets due to the enforcement of the Minsik-i Act is believed to have made related special contracts popular.
The number of driver insurance claims decreased... due to fewer traffic accidents caused by COVID-19
Driver insurance is a product that covers criminal liabilities such as fines imposed for traffic accidents, settlement payments, and attorney fees. Unlike automobile insurance, which covers civil liabilities such as bodily injury and property damage compensation, it is not mandatory. Despite not being mandatory, the explosive increase was decisively influenced by the enforcement of the Minsik-i Act.
However, the actual number of claims in driver insurance has decreased. During the same period, the number of claims for fines related to car accidents under driver insurance was 9,840, about 7.5% less than the previous year's 9,103. This is analyzed to be due to the reduction in traffic accidents as social distancing measures were strengthened amid the COVID-19 pandemic.
An industry official said, "Although the explosive increase seen last year has not continued, demand for driver insurance remains steady," adding, "Customers are subscribing to driver insurance linked with automobile insurance to prepare for criminal liabilities at a relatively low premium of 10,000 to 20,000 KRW."
Even if multiple driver insurance policies are purchased, insurance payments related to fines and similar penalties are not compensated redundantly. Therefore, when subscribing to driver insurance, it is necessary to carefully compare and review whether there is overlapping coverage or the possibility of increased coverage for fines and criminal settlement payments.
Meanwhile, the Minsik-i Act, which came into effect on March 25 last year, stipulates that if a child under 12 years old dies due to a driver's negligence in a school zone, the driver shall be sentenced to life imprisonment or imprisonment for three years or more. If a child is injured, the driver faces imprisonment from one year to 15 years or a fine ranging from 5 million to 30 million KRW. With the strengthened penalties, the number of traffic accidents in school zones also decreased last year. According to the Ministry of the Interior and Safety, 478 traffic accidents occurred in school zones last year, a 15.7% decrease from 567 the previous year. The number of fatalities also dropped from six to three during the same period. However, some analyses suggest that the reduction in traffic accidents is also influenced by fewer school days due to COVID-19.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
