Insured cars aren't covered for quake damage
By Nam Hyun-woo
Despite growing fears that Korea is no longer safe from earthquakes, local insurance firms are still reluctant to introduce policies safeguarding consumers' health and assets from natural disasters.
The main reason is those policies would not be profitable for the industry, they said.
Unless the government shares a bigger financial burden of reimbursing insurance holders with assets damaged by earthquakes, the industry is unlikely to move an inch.
According to industry data from the insurance sector, 132 quake-related claims were reported to nine non-life insurance companies as of Thursday.
On Wednesday, a 5.4 magnitude quake hit Pohang, North Gyeongsang Province, injuring 75 people. More than 1,700 were evacuated from the area as of Friday noon.
Insurance firms expect the number of claims to be at a low level because the ratio of people who subscribed to tremor-related policies remains low.
When a separate quake shook Gyeongju, North Gyeongsang Province, last year, insurance companies made payments on only 638 cases with the total amount standing at only about $4 million.
There are policies covering damage from storms, hurricanes and floods.
Also, there are insurance packages that cover damage to general property such as factories. Fire insurance policies with the inclusion of special clauses about earthquakes mostly cover damage from quakes and tremors.
Farmers and fishermen mostly subscribe to insurance against storms, hurricanes and floods, while insurance companies market and sell insurance property packages to companies.
Households are covered by fire insurance policies in most cases.
The ratio of fire insurance customers who can claim earthquake damage in proportion to the total number of policyholders stood at 0.06 percent at the end of last year, according to the Korea Insurance Development Institute (KIDI).
Automobile insurance policies only cover damage from storms and floods, not earthquakes.
Thus, there is very little insurance that can safeguard consumers from disasters.
The Financial Supervisory Service (FSS), non-life insurance companies and related institutions have organized a task force to come up with protective policies against earthquakes after the Gyeongju quake.
However, the task force failed to come up with a tangible outcome as insurers have been skeptical they can sell such insurance.
"With the rate of policies with quake special clauses remaining low, it is doubtful whether the new policies would sell," an insurance firm official said.
With concerns rising about the safety of Korea, and private companies remaining reluctant to introduce earthquake policies, public calls are growing that the government should further lead in pushing for the introduction of insurance covering earthquake damage.
Currently, private non-life insurers are selling about 20 state-led insurance policies that can help recoup consumer losses from storms, floods and gas accidents.
Certain sectors are required to subscribe to those policies no matter what, and the government bears a large portion of paying reimbursements to those policyholders after claims.
By Nam Hyun-woo
Despite growing fears that Korea is no longer safe from earthquakes, local insurance firms are still reluctant to introduce policies safeguarding consumers' health and assets from natural disasters.
The main reason is those policies would not be profitable for the industry, they said.
Unless the government shares a bigger financial burden of reimbursing insurance holders with assets damaged by earthquakes, the industry is unlikely to move an inch.
According to industry data from the insurance sector, 132 quake-related claims were reported to nine non-life insurance companies as of Thursday.
On Wednesday, a 5.4 magnitude quake hit Pohang, North Gyeongsang Province, injuring 75 people. More than 1,700 were evacuated from the area as of Friday noon.
Insurance firms expect the number of claims to be at a low level because the ratio of people who subscribed to tremor-related policies remains low.
When a separate quake shook Gyeongju, North Gyeongsang Province, last year, insurance companies made payments on only 638 cases with the total amount standing at only about $4 million.
There are policies covering damage from storms, hurricanes and floods.
Also, there are insurance packages that cover damage to general property such as factories. Fire insurance policies with the inclusion of special clauses about earthquakes mostly cover damage from quakes and tremors.
Farmers and fishermen mostly subscribe to insurance against storms, hurricanes and floods, while insurance companies market and sell insurance property packages to companies.
Households are covered by fire insurance policies in most cases.
The ratio of fire insurance customers who can claim earthquake damage in proportion to the total number of policyholders stood at 0.06 percent at the end of last year, according to the Korea Insurance Development Institute (KIDI).
Automobile insurance policies only cover damage from storms and floods, not earthquakes.
Thus, there is very little insurance that can safeguard consumers from disasters.
The Financial Supervisory Service (FSS), non-life insurance companies and related institutions have organized a task force to come up with protective policies against earthquakes after the Gyeongju quake.
However, the task force failed to come up with a tangible outcome as insurers have been skeptical they can sell such insurance.
"With the rate of policies with quake special clauses remaining low, it is doubtful whether the new policies would sell," an insurance firm official said.
With concerns rising about the safety of Korea, and private companies remaining reluctant to introduce earthquake policies, public calls are growing that the government should further lead in pushing for the introduction of insurance covering earthquake damage.
Currently, private non-life insurers are selling about 20 state-led insurance policies that can help recoup consumer losses from storms, floods and gas accidents.
Certain sectors are required to subscribe to those policies no matter what, and the government bears a large portion of paying reimbursements to those policyholders after claims.
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