A Study on the Legal Issues of Compulsory Insurance for Multi-Unit Dwellings

Abstract

Most Korean citizens reside in multi-unit dwellings. In such densely populated and confined spaces, there is a significant risk of accidents, including fires. Accordingly, compulsory insurance coverage is taken out for such incidents, for example, personal injury liability insurance for fires, disasters, elevator accidents, and children's playground accidents. This paper investigates several issues regarding compulsory insurance for multi-unit dwellings and offers measures for improvement. Regulations on liability for damages by owners of special buildings in relation to fire-related disaster compensation and insurance enrollment are examined, with a specific focus on the provisions in the Act on the Indemnification for Fire-caused Loss and the Purchase of Insurance Policies that restrict the handling of bodily injury liability special coverage for fire incidents to insurance companies. Additionally, the justification behind the penalty provisions for non-enrollment in bodily injury liability special coverage for fire incidents is assessed. Institutions related to deductibles, like insurance companies, are involved in the administration of various compulsory insurances; however, notably, there are no limitations imposed on these institutions by other laws governing compulsory insurance. Consequently, it is unjust to confine the administration of personal injury liability insurance for fires solely to insurance companies when considering the principles of equity. Furthermore, the punitive measures for non-compliance with insurance requirements seem excessively severe. It is necessary to expand the scope of insurance companies specified in the Law on Personal Injury Liability Insurance for Fires to include institutions related to deductibles. Furthermore, it is deemed necessary to align the penalties for non-compliance with compulsory insurance with the sanctions imposed on other forms of compulsory insurance. Therefore, a proposal for legislative amendment is presented to address these concerns. This paper also examines the issue of tenants bearing the burden of insurance premiums while being excluded from the benefits of insurance. In the case of fire insurance, amendments to standard terms and conditions have been made to protect tenants. However, these amendments are yet to be incorporated into disaster insurance, leaving tenants without legal or precedential protection should disaster insurance be the only policy obtained. Therefore, a proposal for the amendment of the terms and conditions of disaster insurance is offered that includes provisions for tenant protection. In conclusion, this paper identified potential concerns associated with the concurrent reimbursement of liability insurance for multi-unit dwellings and internal medical expense coverage riders that are part of comprehensive medical insurance. These concerns include the potential for an increase in intentional accidents and the facilitation of excessive medical treatment. Given these concerns, this study recommends that the terms and conditions of comprehensive medical insurance be revised and proposes that medical expenses received to cover actual expenses should be compensated proportionally in accordance with insurance contracts.