Recently the number of automobiles registered in Korea passed 23 million, reflecting a rapidly rising penetration of motor vehicles. Motor vehicle owners are required to purchase an automobile insurance policy to cover accidents. Under the current Act, in the event of motor vehicle accidents, due to the asymmetry of information between policyholders and insurers, both policyholders and persons who suffered damage have no choice but to accept insurance money paid by insurers. Since individuals who intend to protest the insurance money estimated and paid by insurers need to file a lawsuit for relief, policyholders who cannot afford the time nor have the economic resources for this lawsuit often renounce this exercise of their rights.

This Amendment aims to protect due rights of policyholders and ensure fair and prompt resolution of disputes related to insurance money for motor vehicle accidents and thus to prevent unnecessary social costs, by installing an automobile insurance disputes mediation committee with the Ministry of Land, Infrastructure and Transport (Article 39-14 through 39-25 newly inserted).

Installation of an automobile insurance dispute mediation committee (Article 39-14)