Liability and Auto Insurance, Korea

INSURANCE:
Under Korean Law, auto liability insurance is compulsory for vehicles with an engine displacement size of 50cc and above for use on the road. Insurance is not compulsory for moped or other vehicles under 50cc, but owners are strongly encouraged to purchase it. In fact, no foreign resident or visitor should drive any vehicle without full insurance coverage given the liability policies and practices in Korea.

Auto insurance policies are issued for a period of one year with the renewal date corresponding to the vehicle’s inspection date. When a vehicle is sold, the “CALI” (Compulsory Auto Liability Insurance) transfers automatically for a period of 15 days from the former owner to the new owner.

New owners should purchase auto insurance in excess of “CALI”. Insurance policies with unlimited liability for bodily injury are available in Korea and such coverage is a prerequisite for protection under the Special Law. Auto insurance policies can only be purchased from companies licensed by the Korean government. Each company provides the same form of coverage at standard premium rates and there are a number of U.S. and foreign insurance companies operating in Korea. Some Korean insurance companies also have English speaking staff. Look for the insurer who can provide the best service.

LIABILITY:
Although much improved in recent years, the traffic injury and death rates in Korea are still much higher than those in many Western countries. Drivers are liable for damages caused by their negligent driving and this liability can include criminal charges. However, in Korea, liability might be influenced more by the amount of damage than by the degree of negligence. This is especially true in case of serious personal injury or death. It is also possible that an expat driver may be seen to be more liable than a Korean would be under the same circumstances and this is one of the reasons many people have avoided driving in Korea. It is worth noting, that this, too, is changing. 

Civil Liability applies in the event of injury to a pedestrian and the driver and/or owner of the vehicle will be required to establish lack of fault. Damages generally include medical expense, lost wages, loss of future earnings as well as pain and suffering. In cases of death, damages are paid to the family. Some of these civil liabilities can be covered by your auto insurance; it is common for civil liability to extend to the driver’s employer or to the owner of the vehicle involved in the accident. 

Criminal Liability applies, in addition to civil liability, to drivers who cause personal injury or death unless he/she falls under the ‘Special Law’. However, even in ‘Special Law’ situations, if the driver does not aid the victim or was in violation traffic laws, he/she may arrested and detained until a satisfactory settlement payment is made to the victim or the victim’s family.

 Customary Liability refers to a common practice in Korea that involves the victim or her/his family seeking additional compensation over and above what the insurance pays. The threat of criminal prosecution is often used since the police and prosecutors will not usually drop the matter until the victim is completely satisfied. Even in cases where the driver is not detained because of the ‘Special Law’ protection, customary liability may be unavoidable. 

The Special Law provides that the driver will not be criminally liable if:

1. The party suffering the injury or damage states in writing that he/she does not want the 
   driver to be punished, or
2. The car involved in the accident is covered by a comprehensive auto insurance policy that provides unlimited personal injury compensation and pays the victim for medical expenses and other related costs in advance of final settlement.

1. has not taken measures to aid the victim; or
2. has moved the victim in an attempt to hide evidence of the accident; or
3. did not comply with accident signals, the instructions of traffic police or any sign preventing the passage of motor vehicles, or
4. crossed the center line of the road, drove across the road or turns, or operated the vehicle other than as permitted by law; or
5. exceeded the sped limit by 20km/hr or more; or
6. passed other cars in a manner not permitted under the Road Traffic Law, or
7. did not respect a pedestrian’s rights on a walkway, as provided in the Road Traffic Law; or
8. did not have a valid Korean or International Driver’s License (at the time of the accident); or
9. was intoxicated or under the influence or drugs at the time of the accident. (Note: Korean law sets the maximum legal blood alcohol content at 0.5 milligrams/milliliter. For breath analysis, the limit is 0.025 milliliters/liter.).

NOTE:

1. The legal intoxication threshold in Korea is lower than in most Western countries. (Korean law sets the maximum legal blood alcohol content at 0.5 milligrams/milliliter. For breath analysis, the limit is 0.025 milliliters/liter.)
2. The laws, and therefore the police, are extremely tough on drunk drivers.
3. Given the traffic conditions in Korea, it is especially important to be constantly alert and able to react swiftly.
4. The penalties for drinking and driving are very severe. (see traffic regulations – drinking and driving)
5. Mass transit options are readily available, taxis are plentiful (you can either hail them on the street or call one – see taxis) and there are driving services available to drive your car home for you if you're unable to do so.

NB: Check out the K4E Directory for information on Insurance Agents

K4E Editor: We try to make the information on Korea4Expats.com as complete and accurate as possible, so if you notice any errors or omissions in the content above, please let us know at info@korea4expats.com.