More than half of the policyholders have third-party liability insurance with a coverage limit of over 1 billion Korean won.

As car repair costs and vehicle prices rise, the number of auto insurance policyholders choosing high-limit third-party liability insurance has rapidly increased, while the usage rate of discount clauses linked to driving mileage and safety devices has also expanded.

According to the “2025 Personal Auto Insurance Purchase Status Analysis” released by the Insurance Development Institute on the 21st, last year, 51.0% of personal auto insurance policyholders set their third-party liability coverage limit at over 1 billion Korean won. This proportion has been increasing annually from 37.1% in 2023 and 43.8% in 2024. Third-party liability insurance covers damages caused to others’ vehicles or property due to vehicle accidents. The analysis suggests that this reflects recent increases in imported and high-priced cars, rising costs of parts and labor for repairs, which may lead to larger compensation amounts per incident. In fact, the average price of new personal vehicles this year is 52.43 million Korean won, up from last year, and the proportion of coverage limits of 300 million won or more has also expanded to 84.6%.

While drivers are increasing their coverage levels, there is also a clear trend to reduce premium costs. The insurance rate for own vehicle damage coverage (i.e., collision coverage) is 85.8%, up 1.2 percentage points. On the other hand, insurance purchase channels are shifting toward less expensive, non-face-to-face channels. The share of online marketing channels, such as direct purchases via official websites or apps, has increased to 51.4%, while face-to-face channels through insurance planners and telemarketing have decreased to 31.7% and 15.8%, respectively, both below last year. By age group, the highest online purchase rate is among people in their 30s at 69.1%, and even those over 60 reach 36.3%, indicating that digital insurance purchasing is spreading across all age groups.

Discount clauses that help save premiums are also becoming more active. The mileage-based clause, which refunds part of the premium if driving distance is below a certain threshold, has an insurance rate of 88.4%, with an average refund rate of 10.2%, both higher than last year. The average refund amount per person is 133k Korean won. Additionally, as vehicles equipped with advanced safety devices such as emergency braking systems and lane-keeping warning systems increase, the scope of applicable premium discounts has expanded. The installation rates of these devices have increased by 17.1% and 15.5%, respectively. This indicates that detailed risk-reflecting information such as dashcams, safety devices, and driving mileage is being increasingly integrated into premium calculations.

In the discount or surcharge levels that provide premium reductions or increases based on accident records, a trend toward safer driving has also been confirmed. Policyholders enjoying premium discounts account for 89.5% of the total, up 0.6 percentage points from last year, and the proportion of policyholders with improved levels compared to last year has reached 60.9%. The Insurance Development Institute interprets this as a result of the increased adoption of advanced safety devices leading to lower accident rates, as well as drivers’ growing tendency to practice safe driving to reduce premiums. President of the Insurance Development Institute, Yoo Chang-hyun, explained that amid soaring fuel prices and a climate of discouraging vehicle travel, mileage clauses are a way to both save fuel costs and receive premium refunds. This trend may lead auto insurance beyond mere mandatory coverage products, toward expanding protection scope while finely adjusting costs based on driving habits and vehicle safety levels.