Starting next month, patients with minor sprains or contusions from traffic accidents who require treatment beyond eight weeks will need to undergo a review by medical professionals. The practice of routinely paying “future treatment costs” to minor injury patients during settlement negotiations will also be eliminated in principle. The goal is to curb excessive medical treatment and insurance payout leakage, thereby suppressing factors driving up auto insurance premiums.
On the 2nd, the Financial Supervisory Service announced amendments to the standard auto insurance policy terms centered on these changes. Financial authorities identified that excessive medical treatment for “minor injury patients” with light injuries from traffic accidents has led to leakage in auto insurance payouts. Auto insurance, which recorded a deficit of 9.7 billion Korean won in 2024, saw its deficit balloon to 708 billion Korean won last year. This year, it has already posted a deficit of 163.7 billion Korean won through May.
The new system’s core is introducing a separate verification process for long-term treatment of minor injury patients. The targets are patients diagnosed with sprains or simple contusions among injury grades 12–14 under the Automobile Damage Compensation Security Act. Severe injury patients (grades 1–11), such as those with fractures or organ damage, are not subject to review. Infants and pregnant women are also excluded due to risks of aftereffects.
Currently, minor injury patients can continue treatment by submitting a medical certificate if treatment exceeds four weeks. Under the new rules, to extend treatment beyond eight weeks, patients must submit a medical certificate, copies of medical records, and imaging data (if X-ray, CT, or MRI scans were conducted) to the insurer within seven weeks of the accident.
Insurers will forward these documents to the Korea Automobile Damage Compensation Promotion Agency, where medical professionals will determine if long-term treatment is necessary. Review results will be notified to patients within seven days of application. If the review is delayed, the insurer will cover treatment costs until the result is available. Even if long-term treatment is deemed unnecessary, the insurer will pay for costs incurred up to the review completion.
Patients who disagree with the review result can file an objection with the Land, Infrastructure and Transport Ministry’s Compensation Dispute Mediation Committee within seven days of notification. The committee plans to notify its deliberation results within 14 days of application.
The criteria for paying “future treatment costs” during settlement negotiations will also change. Future treatment costs are payments made in advance by insurers for anticipated treatment expenses before treatment concludes. In auto insurance compensation practices, they are commonly referred to as “settlement funds.”
Previously, future treatment costs were routinely paid to minor injury patients despite lacking clear grounds in insurance terms. Going forward, they will only be paid to severe injury patients (grades 1–11) if medical data objectively confirms the need for future treatment. Minor injury patients will receive insurance coverage only for actual treatment costs incurred until treatment ends.
The long-term treatment review for periods exceeding eight weeks will apply to accidents occurring after September 10. For accidents before that date, even if treatment is ongoing, the revised measures will not apply. The future treatment cost payment criteria will apply to contracts starting after October 25.
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