By Yoon Ja-young
Staff Reporter

The same driver driving the same car may be paying higher car insurance premiums once he moves to South Jeolla Province. The government set up a plan to differentiate auto insurance premiums from region to region, only to meet fierce opposition from provincial governments.

The Ministry of Public Administration and Security recently invited officials from provincial governments to a discussion. The ministry has been considering differentiating insurance premiums for each region as part of a plan to cut car accident numbers to half by 2012.

According to the Organization for Economic Cooperation and Development (OECD), the death toll per 10,000 cars averaged 3.4 in Korea as of 2005, the highest level among OECD member countries. It doesn't mean, however, that all Korean drivers are equally exposed to the danger.

The ratio of people who died in car accidents averaged 29.6 per 100,000 people in South Jeolla Province last year, the highest level in the country. North Gyeongsang Province followed with 28 deaths per 100,000, and South Chungcheong Province with 27.9.

Insurance companies, consequently, were paying out more insurance money in these regions. The auto insurance loss ratio, or the ratio of the insurance money payout to the insurance premium, stood at 82.9 percent for South Jeolla Province, followed by South Chungcheong Province at 77.9 percent.

The ministry predicts that allowing insurers to levy different insurance premiums for each region could help decrease the number of car accidents, as local governments will be motivated to improve road conditions and make other efforts as well. If executed, owners of cars registered in South Jeolla Province and South Chungcheong Province, for example, would be paying higher insurance premiums than those of cars registered in Seoul.

According to the ministry, a number of countries, including the United States, Japan, the United Kingdom, Germany, France, and Italy, are already levying different insurance premiums according to region.

However, regional governments as well as their residents are opposing the idea. They say that the ministry should consider poor road conditions in these provinces, which also are poorer than others in terms of budget. In South Jeolla Province, for example, only 69.3 percent of roads are paved. Moreover, the measure would be of no use if drivers registered their cars with other regional governments to avoid higher insurance premiums.

Faced with the opposition, the ministry announced that it has no concrete plan on differentiation yet. The Financial Supervisory Service also considered the differentiation measure in 2003, but gave up due to opposition.

chizpizza@koreatimes.co.kr