The financial regulator of South Korea has announced that drivers that are less at fault in a car accident will pay lower motor insurance premiums, while those who are more at fault will pay more.
The change, which will take effect in September, seeks to adjust the balance of premiums paid between more reckless and more careful drivers.
In the current system, a driver that is 80% responsible for a car accident will receive the same rate increase as the other driver who is responsible for just 20% of the accident, according to Yonhap.
Beginning September 01, a policyholder who is less than 50% responsible for an accident will pay lower premiums, said the Financial Supervisory Service in a statement. Previously, a driver that is 20% responsible for an accident will have a 34% increase in motor premium. But after the change, the same incident will result in just a 10% increase in premium.
According to Kwon Soon-chan, deputy governor of insurance of the FSS, the vast majority of drivers that are more careful will pay lower motor insurance premiums under the new system.
He estimated that insurance premiums for around 150,000 drivers will decline by an average of 12.2%, or a combined KRW15.1 billion (US$13.1 million).
Related stories:
Latitude Brokers expands to South Korea
Hyundai Marine & Fire receives ratings downgrade from A.M. Best
Motor and indemnity medical insurance premiums to face tighter regulation
