Park Han-sol reports on Korea's financial regulators, along with fintech and insurance. She previously wrote about the art world, from biennales and exhibitions to fairs and auctions, with a focus on Seoul and the figures shaping the scene. Before joining The Korea Times, she spent a year at ABC News' Seoul bureau, contributing to coverage of major Asia-Pacific events.
Regulator introduces auto insurance discounts for vehicle rotation compliance
A signboard outlining a five-day vehicle rotation scheme, under which cars are asked to stay off the road one designated weekday based on license plate numbers, stands at a public parking lot in Busan, April 8. Yonhap
By Park Han-sol
Drivers who comply with a government-led vehicle rotation scheme aimed at easing energy supply strain will receive a 2 percent annual discount on their auto insurance premiums under a new policy-backed rider announced Monday. The benefit will be applied retroactively from April 1.
The plan was unveiled at the National Assembly in Seoul by the Democratic Party of Korea’s special committee on economic responses to the Middle East conflict, in coordination with the Financial Services Commission and the General Insurance Association of Korea.
The measure comes as the U.S.-Iran war continues to heighten concerns over global oil supply. Since April 8, public sector vehicles have been subject to an odd-even rotation system, which restricts their use every other business day based on license plate numbers.
For private vehicles, a five-day rotation scheme, under which cars are asked to stay off the road one designated weekday, remains voluntary.
To encourage participation, a temporary 2 percent premium discount is set to be offered to eligible drivers across all insurers. The program applies only to private passenger vehicles, excluding commercial and business-use cars. Electric vehicles, which are not subject to the rotation scheme, as well as high-end vehicles valued above 50 million won ($34,000), are also ineligible. Around 17 million vehicle owners are expected to qualify.
The size of the discount will be calculated based on how long an individual participates in the scheme.
Insurers had previously raised concerns about the lack of a reliable way to verify compliance, noting that without credible tracking, the system could be vulnerable to false claims.
To address this, insurance companies plan to use driving-record apps and existing mileage-based insurance data to confirm whether drivers adhered to the scheme.
Another sticking point had been how the new measure would interact with existing mileage-based discount programs. Major non-life insurers such as Samsung Fire & Marine Insurance already offer premium rebates to drivers who keep annual mileage below certain thresholds.
Authorities have decided to allow overlapping enrollment, meaning drivers can benefit from both discounts.
Insurers are set to begin accepting advance applications from policyholders in the second week of May. Applicants will need to submit a declaration confirming their participation in the rotation scheme, though specific procedures will vary by company.
Even if a driver who uses their vehicle on a designated off-day is involved in an accident, insurance claims will still be paid in full. However, the premium discount tied to the rotation scheme will not apply in such cases.