Just Two Days of Heavy Rain... Flooded Car Damage Reaches 130 Billion Won "Record High"

On the 9th, vehicles that were submerged due to heavy rain in front of Jinheung Apartment in Seocho-gu, Seoul, are emerging as the water recedes. Photo by Jang Jin-hyung aymsdream@

[Asia Economy Reporter Changhwan Lee] Due to the heavy rain that poured mainly in the central region over just two days on the 8th and 9th, the largest-ever vehicle flood damage amounting to 130 billion KRW has been recorded.

According to the non-life insurance industry on the 12th, as of noon on the 11th, a total of 9,189 flooded vehicles were reported to 12 domestic non-life insurance companies. The estimated damage amount reached 127.3 billion KRW.

Since reports have continued to come in after noon, the damage amount is expected to exceed 130 billion KRW.

This is the largest annual scale since related statistics have been compiled. The previous record was 115.7 billion KRW in damages caused by the 2020 monsoon season and typhoons Bavi, Maysak, and Haishen.

The reason this year's damage is greater than usual is that heavy rain poured mainly in Gangnam, a wealthy area, causing many luxury foreign cars to be flooded.

It is understood that about 3,000 foreign cars were reported as flood-damaged to major non-life insurance companies due to this heavy rain. Among them, a Ferrari worth well over 500 million KRW was also reported as a flooded vehicle.

Ultra-high-end vehicles such as a Mercedes-Benz S-Class worth about 230 million KRW, a Porsche Panamera worth about 180 million KRW, and a Bentley worth about 170 million KRW were consecutively reported. In addition, damage reports for luxury foreign cars such as BMW, Audi, and Volvo continued.

The damage amount for flooded foreign cars alone was 74.54 billion KRW, accounting for more than half (59%) of the total damage amount.

On the morning of the 9th, cars that were submerged due to heavy rain are placed on the road near Daechi Station in Gangnam-gu, Seoul. [Image source=Yonhap News]

As the scale of the damage grew, insurance companies set up task forces and began providing prompt support to affected vehicle owners. DB Insurance and KB Insurance are leasing the Seoul Grand Park parking lot and operating it as a temporary compensation service center. They plan to prioritize towing flooded vehicles and move and manage them in safe locations.

Hyundai Marine & Fire Insurance also established an 'Emergency Flood Recovery Support Camp' mainly in the flooded areas near Gangnam, where heavy rain caused significant flood damage, and is conducting rapid damage recovery support and emergency relief activities.

The financial authorities have also stepped in to provide support. The Financial Supervisory Service recently announced that, regarding vehicle flood damage caused by the recent heavy rain, it has taken measures to ensure prompt compensation for damaged vehicles except for those where flooding is clearly due to intentional acts.

They explained that even if vehicle flooding occurred without opening windows or sunroofs or moving the vehicle in risky areas, compensation would be provided unless intentional acts by the driver or others are proven, and this direction was shared with insurance companies.

As flood damage to vehicles increases, the loss ratio of automobile insurance is also expected to rise. Major non-life insurance companies recorded a favorable automobile insurance loss ratio in the 70% range in the first half of the year, but the loss ratio is expected to increase by more than 1 to 2 percentage points in the second half.

An insurance company official said, "As flood damage has been recorded at the largest scale ever, it is inevitable that there will be a negative impact on the automobile insurance loss ratio."