Record rainfall in South Korea in recent days has caused significant damage and loss of life from flooding and landslides. As much as 16 inches of rain was recorded in a 24 hour period in the capital Seoul, an astounding amount of precipitation for a short time span. Despite the fact that South Korea is exposed to these types of weather disasters as well as typhoons, the uptake for weather risk insurance is said to be slow.
This article in the Korea Joongang Daily discusses the lack of insurance cover for automobiles struck in the flooding. In South Korea it is optional to add flood damage cover to your car insurance policy and as a result many will pay for damage themselves. The Korea Insurance Research Institute said that as few as 55% of drivers have signed up for the optional flood cover, which would cover them for damage to their automobiles from flood or typhoons. The article suggests that there is low public interest in insurance policies that cover weather risks or natural disaster.
This comes as a surprise considering that South Korea is a country so exposed to weather risks and natural disasters. The article also mentions an index based weather risk policy that was launched in June by Samsung Fire & Marine Insurance (which we wrote about at the time here). Apparently ‘hardly any were sold’ and they suggest this points to a lingering disinterest in weather risk protection. “Much of the public seem oblivious to the need for protection against weather,” said Lee Sang-hyuk, spokesperson for Samsung Fire & Marine.
It seems that education is required in South Korea to increase awareness of the optional weather insurance cover but it would also seem prudent to make the flood insurance option for automobiles mandatory as it would be in many other countries.