By Yoon Ja-young
Bicycle riders are expected to get insurance coverage from later this year.
The Financial Supervisory Service has commissioned the Korea Insurance Development Institute to assess the risk ratio for insurance products covering bicycle accidents by November.
The plan followed an explosion of bicycle commuters cycling to office in the wake of a global oil price hike and growing health consciousness.
The country, however, hasn't backed up cyclists with enough infrastructure. There were 1,374 bicycle accidents last year, of which 69 were fatal, but cyclists have been marginalized from insurance coverage.
Bicycles are categorized as cars according to traffic law, and are subject to the same regulations as cars in case of accidents. If a cyclist collides with a pedestrian on a sidewalk or bicycle path, for example, the cyclist is liable. Cyclists might face criminal charges as they are not insured. Consequently, an increasing number of cyclists have been calling for insurance products.
Since there was no established risk ratio for bicycle accidents, it was difficult for insurers to develop products covering bicycle riders. Non-life insurers can develop insurance products for cyclists once the risk ratio is established, including premium and insurance money.
But there is also skepticism whether bicycle insurance would work. Insurers may be reluctant to sell the policies due to a relatively high loss ratio. Samsung Fire and Marine Insurance, for example, launched a product for bicycle riders in 1997, but suspended it after a few years due to growing insurance money payouts.
Though bicycles are more vulnerable to accidents, ascertaining who is responsible for an accident isn't always clear. Since bicycles are not registered, the potential for fraudulent claims is high.