Insurance companies flooded with claims for water-damaged vehicles

Cars are left abandoned in Seocho District, southern Seoul, on Tuesday after heavy rain on Monday. [NEWS1]

Insurance companies are battling costly claims as a result of the record-breaking rainfall in Seoul.

According to the General Insurance Association of Korea, 5,657 reports were made to the five major insurance companies — Samsung Fire and Marine, DB Insurance, Hyundai Marine Fire and Insurance, Meritz Fire and Marine Insurance and KB Insurance — related to flood damaged vehicles as of Wednesday morning, due to the heavy rainfall in Seoul.

The five companies are expected to spend around 77.4 billion won ($59 million) on insurance payouts, with imported cars costing them 42.4 billion won.

Samsung Fire and Marine Insurance received 2,371 reports related to flood-damaged cars as of Wednesday morning, expected to cost the company an insurance payout of 40 billion won. Of the total, 939 were for imported car owners, costing around 25.1 billion won.

DB Insurance received 1,247 reports for cars with flood damage as of Tuesday midnight, with imported cars making up for 397 cases. The company is expected to pay around 15.6 billion won for insurance.

Hyundai Marine and Fire Insurance received damage reports for 1,047 cars as of Wednesday morning, with 245 being imported cars. KB Insurance received 739 reports as of Tuesday night, with 266 being imported cars.

Gangnam District in southern Seoul was one of the areas hardest hit by the torrential downpours. This area is also known to be home to many expensive imported cars.

“Those in the car insurance division are panicking as there are a lot of damage reports coming from the Gangnam area,” said a spokesperson for an insurance company. “Cars that are flooded are declared write-offs, and insurance companies will have to make a huge payout for damages incurred to the expensive imported cars.”

Cars are declared write-offs when the costs to repair the vehicles are more than the value of the car.

With rain forecast to continue throughout the week, more claims are expected to be filed.

According to Hyundai Marine & Fire Insurance’s research lab, 56.3 percent of flood-damaged cars were outside when torrential rain fell. Dongjak District in southern Seoul, had hourly precipitation 137 millimeters between 9 and 10 p.m. on Monday, breaking the previous record of 118.6 millimeters in 1942.

BY BAE JAE-SUNG, LEE TAE-HEE [lee.taehee2@joongang.co.kr]