Starting Next Year, 10% Increase in Car Insurance Premiums for School Zone Traffic Violations

Insurance System Changes Starting from 2022

On the first day of the revised Road Traffic Act, which includes no-parking zones in child protection areas and mandates special traffic safety education for drivers who cause traffic accidents in these zones, students are going to school at an elementary school in Seoul on the 21st. Photo by Mun Honam munonam@

[Asia Economy Reporter Oh Hyung-gil] Starting next year, if traffic laws are violated in school zones and at crosswalks, car insurance premiums will increase by up to 10%. Medical device manufacturers and importers will also be required to subscribe to liability insurance for consumer damage relief.

On the 27th, the Life Insurance Association and the General Insurance Association announced changes to the insurance system taking effect next year, including market activation and expansion of product changes and subscription targets.

From January next year, if caught speeding in a children's protection zone, insurance premiums will increase by 5% for the first violation and 10% for two or more violations. The premium surcharge for violations in children's protection zones has been applied since September this year for violations recorded after January this year, starting with automobile insurance policies. The same regulations were applied simultaneously for speeding in elderly protection zones and disabled protection zones.

If a driver fails to stop when a pedestrian is crossing at a crosswalk, violating pedestrian protection duties, insurance premiums will increase by 5% for 2 to 3 violations and by 10% for 4 or more violations. The premium surcharge for pedestrian protection violations at crosswalks will apply to violations starting January next year.

If a person dies or is injured due to falling objects from a vehicle in operation whose owner is unknown, the government will provide compensation. Currently, the government guarantee program covers uninsured vehicles and hit-and-run accident victims, but from January next year, victims of falling object accidents will be added.

Drivers (named insured) who previously received spousal discounts under their spouse’s automobile insurance will be recognized for up to three years of no-accident periods when subscribing to a separate automobile insurance policy for the first time. Currently, a wife covered under her husband’s spousal discount cannot have her no-accident record recognized if she subscribes to insurance separately.

The maximum value of health management devices provided under health promotion insurance products will increase from 100,000 KRW to 200,000 KRW. Differential provision of devices according to the premium tier is also permitted for contract holders of the same health promotion insurance product. Additionally, starting February next year, insurance companies will be allowed to operate prepaid electronic payment services so that contract holders can purchase goods using points earned through their health management efforts and achievements.

Liability insurance will be mandated for medical device manufacturers and importers to ensure smooth damage relief in case of accidents caused by medical device side effects.

Guidelines requiring the refund structure of no (or low) surrender value insurance products to be designed most favorably for consumers will be implemented from next year. To prevent incomplete sales driven by commission competition, a cap on first-year commissions (1200%) will be applied to non-face-to-face sales channels such as telemarketing and home shopping.