Insurance claims pile up amid escalating blame game over Mercedes EV fire

Industry

Insurance claims pile up amid escalating blame game over Mercedes EV fire

Published: 11 Aug. 2024, 17:57 Updated: 11 Aug. 2024, 18:56

SARAH CHEA
chea.sarah@joongang.co.kr

Around 880 vehicles were reported as damaged due to the Mercedes-Benz EQE sedan that burst into flames in an underground parking lot in an apartment complex in Incheon on Aug. 1. [NEWS1]

Around 600 auto insurance claims were filed for vehicles damaged by the recent Mercedes EV explosion in Incheon as of Sunday amid an intensifying blame game over who is responsible for compensation.

Korea's car insurers received around 600 claims for vehicles that were either totally incinerated or received damage, according to multiple local reports on Sunday.

CCTV footage shows a Mercedes-Benz EV exploding at an underground parking lot in Incheon on Aug.1. [YONHAP]

In these cases, firms are required to pay out their customers, but the payouts can vary depending on each insurance customer's plan.

Insurers can be reimbursed depending on who was at fault, which in this case could be either the Mercedes owner, the manufacturer of the Mercedes or the equipped batteries.

The number of damaged cars totaled to 880 vehicles so far, according to reports, 40 of which were totally incinerated, far exceeding the initial announcement of 140 announced by fire authorities.

A Mercedes EQE burst into flames in an underground parking lot in an apartment complex in Incheon on Aug. 1 and injured 23 people. Around 500 households suffered from electricity or water supply outages for a week.

The fire authorities and police have been pursuing a joint investigation to determine the exact cause of the car explosion, as the blaze broke out while the vehicle was parked for almost three days and was not charging.

People from an apartment complex in Incheon take consultations for compensation in Incheon on Aug. 5 after a Mercedes EV burst into flames in an underground parking lot that resulted in 23 injuries. Some 500 households have suffered from electricity or water supply outages for a week. [YONHAP]

A legal battle will likely follow between insurers and manufacturers over the root cause of the fire, which could be the key to resolving the compensation issue.

"In the Incheon fire case, it seems like the car owner is not guilty of the incident, as the Mercedes vehicle was parked for over 60 hours," said attorney Ha Jong-seon of the law firm Naru. "In this scenario, the burden of proof falls on Mercedes."

"The battery pack will be the most important piece of evidence in the incident, but even if it had been burned to the extent that it can't determine the cause, the responsibility lies with Mercedes."

The EQE sedan is confirmed to have batteries manufactured by the Ganzhou-based Farasis Energy, a fact that surfaced public anger over such a premium brand using batteries from a lesser-known Chinese company.

Mercedes-Benz Korea said it will donate 4.5 billion won ($3.3 million) to provide "humanitarian support for residents to help them return to their normal lives as soon as possible, regardless of the cause of incident," adding that it dispatched experts from the Korean arm as well as from the German headquarters to cooperate with the fire authorities investigating the cause of the incident.

As public fear grows, the Environment Ministry has planned to hold a meeting with the related ministries on Monday to come up with strengthened measures on preventing further EV fire cases.

Some measures will be discussed, such as requiring automakers to disclose details of the installed batteries — including the brand and model names — to consumers when they launch new cars. The government aims to announce the new set of rules by September.

The burnt Mercedes EQE sedan is transferred for investigation in Incheon on Thursday. The EV explosion injured 23 people and damaged around 880 vehicles in the parking garage. Some 500 households have suffered from electricity outages for a week. [YONHAP]

Hyundai Motor on Friday unveiled the brands of batteries it used in a total of 13 EVs upon customers' growing requests.

The company's Kona Electric uses China's CATL batteries, while the Ioniq 5 and 6, Casper Electric and the Porter mini-truck EV use batteries from local firms LG Energy Solution and SK On.

The Genesis GV60, the electrified GV70 and the G80 are powered by SK On batteries.

Around 0.78 cars per 10,000 EVs burst into flames, according to data from Korea's Insurance Development Institute's analysis on fire cases in the five years between 2018 and 2022, compared to 0.9 cars per 10,000 units in the case of non-EVs.

The average financial loss, however, amounted to 13 million won for an EV, while it stayed at only 7 million won for a non-EV.

BY SARAH CHEA, CHOI SEO-IN [chea.sarah@joongang.co.kr]