"Fire Insurance: Check if Coverage Is Excessive and Explore Joint Underwriting Options"

Financial Supervisory Service Announces Fire Insurance Enrollment Precautions
Fire Insurance Coverage Expected to Expand Within Q3

When subscribing to fire insurance that covers building fires, explosions, and other incidents, it is necessary to check whether unnecessary coverage has been added, causing excessive premium increases. When it is difficult to obtain the desired insurance, it is also advised to utilize the 'joint underwriting' system, where multiple insurers jointly underwrite the policy.

On the 17th, the Financial Supervisory Service (FSS) announced 'Consumer Precautions When Subscribing to Fire Insurance,' which contains this information. Fire insurance is a product that covers damages to buildings and household goods caused by fire, explosions, and similar incidents. Special buildings such as national/public buildings, schools, department stores, wholesale markets, apartments over 16 floors, and factories are subject to mandatory subscription.

Recently, non-life insurance companies have been excessively increasing fire insurance premiums by adding riders unrelated to the accident history or excessively raising coverage limits for buildings with a history of fire or other insurance incidents. The FSS urged consumers to carefully check through insurance terms and conditions and application forms whether unnecessary riders have been added or coverage limits have been excessively increased before subscribing.

Utilizing the withdrawal of application or quality guarantee cancellation systems is also a method. Policyholders can withdraw their application within 15 days from the date they receive the insurance policy. However, withdrawal is not possible if more than 30 days have passed since the application date. Additionally, if the insurer did not provide a copy of the insurance terms and application form to the policyholder, failed to explain important contents of the terms, or if the policyholder did not personally sign the application form, the contract can be canceled within 3 months from the contract date.

The FSS also suggested actively using the joint underwriting system. Owners of special buildings who find it difficult to subscribe to insurance through non-life insurers can use the joint underwriting system to subscribe to fire insurance. In particular, even if an insurer recommends subscribing to fire insurance with riders added or coverage limits increased, causing excessive premium hikes, it is necessary to check and consider the joint underwriting system before subscribing.

The FSS announced plans to expand the buildings eligible for joint underwriting and the coverage scope of fire insurance. Currently, it is limited to self-building damage and liability coverage for special buildings. In the third quarter, buildings eligible for joint underwriting will include apartment complexes with 15 floors or fewer, and the coverage scope will be expanded to include all additional coverages (riders) added to fire insurance, such as flood, pipe damage, and sprinkler damage.