[Asia Economy Reporter Oh Hyung-gil] There are concerns that raising liability insurance premiums for high-priced cars on the grounds that their prices or damage amounts are higher, despite not necessarily causing more damage than other cars, could raise issues of fairness.
On the 22nd, Hwang Hyun-ah, a research fellow at the Korea Insurance Research Institute, stated in the report "Issues and Considerations of Liability Insurance for High-Priced Cars," "The expensive repair costs and rental fees for high-priced cars have been pointed out as factors for increasing auto insurance premiums, and the issue of fairness in premium burdens between owners of high-priced cars and regular cars has been continuously raised."
As of last year, among private passenger cars, imported cars paid 465.3 billion won in premiums and received 1.1253 trillion won (241.8% of premiums paid) in insurance claims. In contrast, domestic cars paid 2.8675 trillion won in premiums and received a total of 2.2491 trillion won (78.4% of premiums paid) in insurance claims.
Researcher Hwang explained, "Based on the premise that this phenomenon is unreasonable, there are calls to reduce liability insurance payouts for high-priced cars or to increase their liability insurance premiums. Measures being considered include restricting the right of high-priced car owners to claim damages and raising liability insurance premiums for high-priced cars."
However, she argued, "Unlike criminal liability, where punishment is imposed proportionally to the offender's illegality, in the realm of civil liability for damages, where compensation is determined by the actual damage amount, the compensation amount inevitably varies according to the price of the damaged vehicle. If the problem is that compensation amounts vary depending on the price of the damaged vehicle, then a fundamental reconsideration of the principle of compensation itself is necessary."
She continued, "When liability insurance premiums for high-priced cars are surcharged, the increased premiums belong to the insurer with which the high-priced car owner is insured, whereas the insurance payout in the event of an accident is made by the insurer of the other party's vehicle. From the perspective of the high-priced car owner, there may be questions such as 'Liability insurance payouts are received from the other party's insurer, so why am I being charged higher liability insurance premiums?'"
Furthermore, she explained that if vehicles equipped with advanced safety devices that enhance safety or eco-friendly vehicles that contribute to carbon emission reduction are surcharged not only on their own damage insurance but also on liability insurance premiums simply because of their high price, it could negatively impact policy directions such as automotive technological advancement, improvement of traffic safety and convenience, and environmental protection.
Researcher Hwang emphasized, "The issue of liability insurance for high-priced cars requires sufficient review of damage compensation principles, insurance premium calculation principles, and the impact on related industries and public life to establish a direction for system improvement."
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