Pardoning Traffic Offenders Worries Insurers
By Yoon Ja-young
Staff Reporter
Many people may not be aware of it, but pardoning traffic offenders is a zero-sum game. The offenders benefit from the generous action but their gain is balanced by the losses of insurance firms and other drivers.
Against this backdrop, local insurers are fretting about the imminent pardoning of traffic offenders by President Lee Myung-bak. Statistics show that car accidents increase following such cases of amnesty. Innocent drivers are also hurt as insurance premiums eventually go up, but the pardoning of traffic offenders continues to occur here every two or three years.
``We cannot officially complain about the government's decision, but we are worried about what it is doing," said a spokesperson of a non-life insurance company.
The Lee administration, which granted amnesty to minor offenders in June last year to celebrate the 100th day of his inauguration, announced Tuesday that over 1.52 million people, most of whom are traffic offenders, will be pardoned on Aug. 15, which marks Korea's liberation from Japan. The move was designed to help ease the economic pains of minor offenders.
As many as 1.23 million people will have their penalty points deleted, and 70,000 who have had their driver's license cancelled or suspended will be pardoned. Around 200,000 who are ineligible to apply for a driver's license test will be able to apply for it immediately.
The measure, however, is worrying insurance companies and innocent drivers. According to research by professor Kwon Young-sun at the KAIST IT Convergence Campus, the pardoning of traffic offenders has caused huge economic costs.
Amnesty for bad drivers was first executed under the President Kim Young-sam administration. Former President Kim Dae-jung did it twice, upon inauguration and in 2002 to celebrate Korea's advancement into the World Cup semifinal. The late former President Roh Moo-hyun executed the action to mark the 60th anniversary of Korea's liberation from Japan. On average, there has been a pardon of traffic offenders every 37.5 months.
In each of cases, including that of President Lee, the presidents claimed that it was aimed at giving those who drive vehicles for their livelihood the chance to drive again. ``In reality, most of the beneficiaries are not the for-livelihood drivers, but ordinary drivers. Hence, it is a typical populist policy,'' Kwon said.
The abuse of the amnesty has increased the number of accidents. According to Kwon, the number of traffic accidents increased by an average of 7,265, or 3 percent, during the first one year after each pardon. In the second year, it grew by 11,971, or 5 percent. As a result, there were 216 more casualties in the first year, and 356 more in the second year after the pardons. The number of the injured grew by 11,530 in the first year, and by 19,000 in the second year.
``The economic cost incurred during the two years after the pardons is estimated to be between 911 billion won and 1.3 trillion won,'' he said.
It is even more problematic as some drunk drivers have benefited from the amnesty. According to Korea Insurance Development Institute, drunk-driving accidents soared by 25 percent following 2002 pardon, and by 13 percent after 2005 amnesty.
Insurers complain that the repeated pardons make drivers expect that there will always be another one on its way. It is marring people's awareness that they have to abide by law. ``The offender may be careful for a few months, but then they say `I can get pardon next year.' I wonder if they give amnesty repeatedly, for so many offenders, like we do, in other countries,'' a spokesperson at an insurer said.
Non-life insurers, which have been suffering from perennial losses in auto insurance, are concerned that the accident rate will go up again upon this round of pardons. Their losses in auto insurance business decreased thanks to oil price hike last year, but hard days are expected to come again.
This means that insurance premiums are likely to go up, which means other, innocent drivers will have to take the burden.