By Lee Hyo-sik
Staff Reporter
Drivers leaving their vehicles home for one day between Monday and Friday will pay 8.7 percent less for auto insurance coverage next year.
The move is designed to ease traffic congestion and prevent accidents, the Financial Supervisory Service (FSS) said Tuesday.
The financial regulator plans to overhaul the structure of auto insurance products in order to provide premium discounts to those who participate in the government's traffic-jam easing campaign.
Seoul city introduced it in March 2006 for the first time among municipal governments to reduce chronic traffic congestion. Over the years, Daegu and other large metropolises across the nation have adopted the measure.
Public officials and employees of public firms are required to abide by the rule when they commute to work.
Visitors to government agencies and many private company workers must abide by the imposition.
About 1 million car owners nationwide had pledged to observe the rule as of August in exchange for up to 2.7-percent discounts on auto insurance premiums. They are required to attach an electronic device to their vehicles, which can verify whether or not they actually leave their cars at home on a week day.
But from next year, those who take part in the campaign will enjoy a maximum 8.7-percent discount.
Currently, the discount compensates only damage inflicted on a driver's own car. But in 2010, the new rule will expand the scope of the coverage, including damage that drivers inflict on other vehicles.
``Drivers will pay the full amount when they subscribe to auto insurance policies. When they are verified as abiding by the rule a year later, they will get refunds of up to 8.7 percent off their premiums. We decided to introduce the refund-system to better ensure that drivers actually keep what they said they would,'' an FSS official said.
Under the new system, drivers will be allowed to break the contract no more than three times a year.
But if they drive on a week day that they are not supposed to on more than three occasions, they will not be entitled to the refund.
For verification purposes, private vehicle operators will have to purchase an electronic device that costs about 25,000 won.
When auto insurance coverage expires, drivers must send movement records stored in the device to the insurance firm for verification.
The FSS official said drivers leaving a car at home for one week day will benefit from not only insurance premium discounts, but also up to 30 percent lower parking fees in public parking lots.
``They also pay 5 percent less in auto-related taxes. If more drivers join the drive less campaign, it will reduce the number of traffic accidents, further lowering auto insurance premiums.''