Korea to reduce auto driver insurance coverage, increase spending burden by 20% from July
From July, car driver insurance coverage will be reduced and self-burden will increase by 20%.
From the second half of 2023, the coverage of auto driver insurance will be reduced and the burden of self-burden on subscribers will increase.
Driver insurance is an insurance that is subscribed to by one in five auto insurance subscribers in Korea.
Therefore, the economic burden on consumers is expected to increase. In the second half of the year, non-life insurers are expected to reduce the coverage of car driver insurance.
It plans to add up to 20% of self-payment for traffic accident handling subsidies and collateral for lawyer appointment costs.
As a result, the coverage of driver insurance is expected to be reduced, increasing the consumer burden on insurance premiums.
Under the new policy starting in the second half of this year, consumers will have to spend up to 20 percent of their own expenses when signing up for auto driver insurance.
This increases the burden of self-burden than before, giving additional financial burdens in addition to insurance premiums.
Automobile driver insurance is optional insurance that guarantees accidents and legal costs that may occur to drivers, which reduces coverage and increases the burden of insurance premiums. Automobile driver insurance is mandatory insurance that drivers must subscribe to.
Therefore, insurance consumers need to have more careful choices and financial plans.
It is important to be fully aware of the changed conditions and benefits of auto insurance and to select appropriate insurance products for the safety of yourself and your family.
Background of 20% increase in self-burden
Automobile driver insurance is an optional insurance that guarantees risks that may occur to vehicle drivers.
It is an insurance that one out of five auto insurance subscribers in Korea have subscribed to.
It guarantees legal expenses incurred by the insured's meandering accident and accidents while driving.
Due to this measure, insurance consumers faced a situation in which driver insurance had to pay 20% of their own expenses.
In addition, as the coverage decreases, the burden of insurance premiums is expected to increase.
According to the Non-Life Insurance Association, the number of new driver insurance contracts was 4.93 million last year, the most sold among single insurance types.
Domestic non-life insurers have been strengthening promotions with profit products in anticipation of a larger driver insurance market in the future.
However, as financial authorities conveyed to the industry that excessive competition for driver insurance and measures to prevent moral hazard for some subscribers were needed, insurers' strengthening of driver insurance operations was also put on hold.
This is because non-life insurers have taken out self-pay cards to prevent side effects from exaggerated competition.
Reduction of automobile driver insurance coverage in July
In the past, driver insurance was a comprehensive product that guaranteed criminal settlement money, lawyer expenses, treatment expenses, disability benefits, and death funds.
However, now that the coverage of automobile driver insurance is reduced, compensation for these coverage items is expected to be limited.
Accordingly, in the event of a traffic accident, the driver will be burdened more, and the amount of insurance payments may also be reduced.
The move can be interpreted as an effort by insurers to maximize profits.
This is because car driver insurance is an insurance product that many people selectively subscribe to. Insurance companies tend to reduce the scope of insurance coverage because they want to generate profits through this.
In other words, insurance consumers are in a situation where they have to pay more limited coverage and more self-burden.
Car driver insurance still plays an important role in the safety and protection of drivers.
In order to prevent an economic crisis and create a more stable driving environment in the event of an accident, the value and importance of automobile driver insurance should be recognized.
