Low-rise Apartments and Villas Also Eligible for Fire Insurance... Improvement of Co-Underwriting System

Other Disasters Such as Floods and Building Collapses Can Also Be Covered

[Image source=Yonhap News]

As financial authorities improve the joint underwriting system for fire insurance, it is expected to become easier for multi-family housing such as apartments under 15 floors, row houses, and multi-unit houses to obtain fire insurance.

On the 13th, the Financial Services Commission held its 16th regular meeting and approved changes to the "Special Building Endorsement Fire Insurance Joint Underwriting Mutual Agreement" applied for by the Fire Insurance Association.

The joint underwriting system for fire insurance is a system where multiple insurance companies jointly underwrite insurance contracts that are difficult to underwrite individually. Although special endorsement fire insurance is mandatory for buildings over a certain area such as national and public buildings, schools, department stores, factories, and apartments over 16 floors, cases of insurance application rejection due to fire history have occurred, leading to the introduction of this system in 2021.

However, multi-family housing such as apartments under 15 floors and villas remained a blind spot in the joint underwriting system due to fire history and other factors. Even when insured, the coverage was limited to damages caused by fire.

In response, the Financial Services Commission, the Financial Supervisory Service, and the non-life insurance industry have decided to address this blind spot. With the improvement of the mutual agreement following this system enhancement, multi-family housing such as apartments under 15 floors and villas can now obtain fire insurance through the joint underwriting system. Additionally, the coverage scope has been expanded to allow policyholders to choose protection against not only fire damage but also wind and flood damage, building collapse, and leakage from water supply and drainage facilities.

A Financial Services Commission official explained, "All multi-family housing can now obtain fire insurance, and as the risk coverage expands from fire to various disasters and accidents, the public will be better able to effectively prepare for loss of life and property."