South Korean Supreme Court Rules Deductibles Claimable from Other Party's Insurer in Shared-Fault Accidents

South Korea's Supreme Court has established a new legal precedent, ruling that individuals can claim compensation from the opposing party's insurance company for their self-paid deductible in traffic accidents where both parties share fault. The top court's decision, made after a public hearing in January, addresses a long-standing issue regarding financial responsibility in shared-fault collisions.

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In a traffic accident, the amount of the self-paid deductible borne by the driver can be claimed from the opposing insurance company.

The case involved a plaintiff, identified as Mr. Park, who was involved in an accident at an intersection in Daejeon in 2020. His vehicle sustained approximately 2.7 million won in repair costs. His insurance covered 2.2 million won, leaving him responsible for a 500,000 won deductible. The accident's fault was determined to be 60% attributable to Mr. Park and 40% to the other driver by the Fault Ratio Dispute Mediation Committee.

Consequently, the other driver's insurer paid Mr. Park's insurer 1.08 million won, representing the portion of the repair costs corresponding to the other driver's 40% fault. However, Mr. Park did not receive compensation for the 200,000 won (40% of his 500,000 won deductible) that he felt was attributable to the other driver's negligence. He sued the opposing insurer, but the appellate court ruled against him, stating the deductible was a cost he agreed to bear under his insurance contract.

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The Supreme Court's Second Division (presiding Justice Kwon Young-joon) overturned the original ruling, which had found Mr. Park’s claim to be without merit, and sent the case back to the Daejeon District Court.

The Supreme Court, however, overturned this decision. It ruled that the portion of the deductible corresponding to the other party's liability remains a claimable amount for the individual, irrespective of any settlements between the insurance companies. The court directed the opposing insurer to pay Mr. Park the relevant amount and advised that any subsequent claims between the insurers should be settled directly between them.

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The Supreme Court ruled that the portion of the self-paid deductible corresponding to the other party's responsibility is still a claimable amount for Mr. Park, regardless of the payments made between the insurance companies.