Changes in Auto
Insurance Rules
FSC to make revisions in auto insurance agreement effective April 1
The Financial Supervisory Commission (FSC) announced recently that it will allow changes in the automobile insurance contract to the extent that insurance premium will be increased while overcharged auto insurance premium will be repaid effective from April 1 next year.
The change will have insurance money paid to those who received damage will be increased from April 1, while overcharged insurance premiums either by mistakes and willfully will be repaid including interest.
The standard for insurance payment including comfort money paid to those who received injuries will be raised in an effort to reimburse the economic losses suffered by those who got hurt in auto accidents. The reimbursement for humans and injuries caused by non-insured cars are concerned the comfort money paid to injuries from the category 5 to 14 will be raised by from 11 percent to 79 percent to balance the comfort money paid to those who have first category injuries.
The meal expenses for hospitalized patients due to auto injuries will be increased from 11,580 won to 13,110 won and the transportation expenses to out patients will be raised from 5,000 won to 8,000 won, up from 13 to 60 percent from the current rates. The comfort money of 500,000 won will be paid to those who lost work capability less than 5 percent, although those who lost work capacity by more than 5 percent are paid. The insurance payment for car damages from auto accidents has also been increased. Cars in use for two years will receive repair expenses of 10 to 15 percent of their prices if repair expenses go over 20 percent of car prices. Currently only cars with a year in use have been reimbursed for their damages if damage repair costs are more than 30 percent of the car price.
In the meantime, if an insurance company overcharged insurance premiums, the company will be required to repay the overcharged insurance premium with interest under the change.
Under the current regulations, overcharged insurance premiums are paid back to policyholders, the change provides for the payment of interest also to make insurance firms to calculate the charges correctly.
The revised provisions will be enforced from April 1 next year to give enough time for insurance firms to prepare for the changes. The move is likely to increase by 1 percent the amount of insurance premiums, but it is up to insurance firms to raise their premiums. The comfort insurance money paid to those who were hurt in auto accidents in the category first to four will remain unchanged as before. But those in the category 5 through 14 will be revised. For those in the category 5, the comfort insurance payment will be increased to 750,000 won from the current 420,000 won, a rise of 79 percent, marking the highest increase among all categories. Those wounded in the category 6 will receive 500,000 won from next year, up 39 percent from the current 360,000 won. The wounded in the category 7 will see their comfort insurance money raised by 33 percent to 400,000 won.
Those in the category 8 will have their comfort insurance payment increased to 300,000 won, a rise of 25 percent from the current rate. The wounded persons in the category 9 will have their comfort insurance payment increased to 250,000 won, an 19 percent rise, while those who sustained the category 10 injury will see their comfort insurance money climb to 200,000 won from 180,000 won, an increase of 11 percent. Those in the category 11 will have their comfort insurance payment rise from 150,000 won to 200,000 won, a 33 percent jump. Those who suffered the category 12 injury will see their comfort insurance money jump to 150,000 won from the current 120,000 won.
The auto accident casualties in the category 13 will see their comfort insurance payment increased to 150,000 won from 90,000 won, a 67 percent jump. Those in the category 14 injury will have their comfort insurance payment rise to 150,000 won from 90,000 won. nw