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Insurance Premiums on Imported Cars to Rise by 130,000 Won
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Insurance Premiums on Imported Cars to Rise by 130,000 Won
  • By Jung Suk-yee
  • October 5, 2015, 00:45
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A BMW that got into an accident in Seoul.
A BMW that got into an accident in Seoul.

 

Owners of imported cars are being expected to pay as much as 130,000 won (US$110) more for premiums on physical damage coverage. So policies to lower car repairs and rental fees, which are much higher than domestic cars even in the same accidents, will be promoted.

According to industry sources on Oct. 4, the reform measure for imported automobile insurance includes the increase in the amount of imported car owners’ insurance payments on physical damage coverage, which are set up based on vehicle classes, by 1.33 million won (US$1,124) on average, up 11 percent from 1.2 million won (US$1,014). The financial authorities will hold a public hearing on the improvement plan on Oct. 13, gathering opinions.

An official from the Financial Supervisory Service said, “Unlike domestic cars, insurers arbitrarily decide on repairs and rent-a-car costs for imported cars, since there is no standard to deal with an accident. It is unfair that domestic car owners should pay for such high expenses to owners of imported cars.”

Until now, there has been a constant controversy over the high costs of insurance coverage, as repair costs of imported cars are 2.9 times higher than domestic cars, while rental costs are 3.6 times higher. Also, repairs of imported cars take 1.8 times longer than domestic cars. When the amount of insurance payments for owners of imported cars increase and the overcharge of repairs and rent-a-car costs improves, domestic car owners will pay 20,000 won (US$17) less for insurance payments.