[Insurance Tips⑧] Do You Know About Free Insurance You Don't Know, Citizen Safety Insurance?

[Asia Economy Reporter Changhwan Lee] # Juseonah (36), an office worker living in Seoul, experienced a harrowing accident a few months ago when her arm was dislocated while getting off a bus on her way to work. The incident occurred as she was pushed by other passengers while disembarking from an overcrowded bus. Not only was the dislocated arm painful, but she was also worried about the medical expenses, which were expected to amount to tens of thousands of won. Then, she heard that the local district office had a citizen safety insurance, which covered a significant portion of her medical costs. Combined with the compensation from her existing private health insurance, she had little to worry about regarding the treatment expenses.

Interest is growing in citizen (district resident) safety insurance, which provides free insurance compensation when people suffer serious injuries requiring expensive medical treatment due to accidents in daily life. Citizen safety insurance is a type of public insurance product that the government subscribes to on behalf of citizens who experience unexpected accidents.

Local governments such as city halls or district offices subscribe to the insurance and bear the full premium cost on behalf of residents. Citizens residing in the jurisdiction of the subscribing local government automatically receive benefits without separate enrollment.

Accidents covered for compensation include injuries caused by natural disasters such as typhoons, floods, and earthquakes; injuries from fires or explosions; injuries sustained while using public transportation; and injuries from traffic accidents within school zones. Depending on the district, coverage may also include death from infectious diseases and treatment costs for dog bite injuries. Enrollment is available regardless of gender or occupation, and pre-existing medical conditions do not affect eligibility.

More than 90% of local governments nationwide have subscribed to citizen safety insurance, allowing most residents to receive compensation for unforeseen accidents.

Claims for insurance benefits can be made within three years from the date of the accident or the diagnosis of a permanent disability. After inquiring about the relevant procedures with the local government, claim forms and required documents are prepared and submitted to the insurance company.

Despite being a good system, there are some points that need improvement. First, many citizens are unaware of the existence of such insurance, resulting in low utilization rates. According to the office of Yong Hye-in, a member of the Basic Income Party, 17 metropolitan local governments nationwide paid about 44.9 billion won in premiums over the past three years, but the actual amount paid out was only about 28.9 billion won, which is just 64%.

The remaining funds ultimately go to the insurance companies. This is why, despite being a good system, there are calls for more active promotion since relatively few people actually benefit from it.

Rescue workers are conducting search operations in the underground parking lot of an apartment in Nam-gu, Pohang-si, Gyeongbuk, where numerous casualties occurred due to typhoon flooding damage last month.
[Image source=Yonhap News]

There are also calls to lower the eligible age for receiving insurance benefits. According to Article 732 of the Commercial Act, insurance contracts for accidental death are prohibited for those under 15 years old. This provision was established to prevent crimes targeting minors for insurance payouts. As a result, children and adolescents under 15 years old cannot receive citizen safety insurance benefits even if they die due to an accident.

Last month, controversy arose when it was reported that a middle school student named Kim from Pohang, Gyeongbuk, who died due to Typhoon Hinnamnor, could not receive the 20 million won citizen safety insurance payout from Pohang City because he had not yet reached the age of 15.