Increase of Allowance through Revision of Standard Stipulation From Next Year

The compensation money for death victims from the car accidents will increase to the maximum 45 million won. When drivers gets wounded from an uninsured car during a drunken driving, they can receive the insurance amount. Also, victims who are injured due to a natural disaster can receive the compensation money like the car injury. Also, the injury caused by belongs of passengers and pedestrians is included the compensation scope.

On December 10, the Financial Supervisory Service (FSS) announced that it would revise a standard stipulation of the car insurance containing these substances and would enforce from January 1, 2003. The revised stipulation will be retroactively applied for the agreement which is effective in the scheduled date of enforcement.

According to FSS, the compensation money of the car accident death victims which is 32 million won for ages between 20 years and 60 years and 28 million won for other ages, will increase to 45 million won and 40 million won respectively.

Kim Chi-Jung, director of insurance supervision bureau, KSS said, “It is increased to 90% of a court settlement amount (50 million won). We adjusted a payment basis to make a rapid compensation and decrease unnecessary lawsuits of victims.”

Also, when policyholders are injured from the uninsured car during the drunken driving, they cannot receive the compensation money from the uninsured car. However, they will be able to receive the compensation money equally like a physical incident in the future.

The physical incident caused by a typhoon, flood and tidal wave will be covered in the compensation extent. So far, for the natural disasters, only car damage is covered.

The loss of belongings such as a mobile phone, notebook computer, camcorder and golf club will be compensated within a limit of the maximum 2 million won per person. However, the loss of cash, marketable securities and jewelries cannot be compensated because of unknown amount of damages.

Also, when a person (permitted insured person) permitted by an owner of the insured car, has the car accident during taking a parents, spouse and children, it can receive the compensation if a mistake of the car owner. In addition, when the driver uses the rent car because of a repair of the accident car, the rent expense can be fully paid at cost.

The FSS decided to change the existing stipulation into easy explainable system and to revise the stipulation system cross the board.

Kim Chi-Jung, director of insurance supervision bureau, KSS said, “Owing to the revision of the stipulation, a premium will increase by 3%. However, we plan not to pass over its burden to customers.”

Dong-Won Kim daviskim@donga.com