Car Insurance to Be Based on Past Driving Record

The amount drivers pay for car insurance will likely be based in part on the number of traffic violations they have incurred, beginning in May 2000.
There has been a lot of controversy among the government, insurance companies, and citizens' groups on how to calculate insurance premiums.
Discussions have been polarized with insurance companies seeking the immediate implementation of discriminating drivers' records, as early as May 1999, while citizens' groups want the proposal nullified altogether.
The Finance Supervisory Commission (FSC) announced on April 11 that it will delay allowing insurance companies to base car insurance premiums on people's driving records, which originally were supposed to take effect next month, to the year 2000 because the FSC needs adequate time to revise initial proposals for drivers' insurance premiums and accumulate a data base for the proposal.
The FSC plans to enlarge the maximum allowable 8 percent discount on car insurance, while reducing overall premium rates by as much as 50 percent in some circumstances.
However, the FSC will set guidelinse for discounts and premiums within certain limits, and allow insurance companies to decide on their own premiums, so as to make them compete freely with each other.
In addition, the FSC is considering reducing the applicable time period of a driver's past driving record that insurance companies can base premiums on to two years from the proposed three years, and reduce the 11 discriminatory items taken into account in determining a driver's car insurance, such as any drunk-driving charges or other violations, to five or six items.
Jangsoo Seo:jsbee@joongang.co.kr