When a car's market value falls due to a traffic accident, compensation is available only if it has been less than five years since delivery and the repair cost exceeds 20% of the pre-accident value.
The Financial Supervisory Service (FSS) on the 23rd shared consumer advisories on loss from car value depreciation through major dispute cases. In property damage coverage under auto insurance, when a vehicle is repaired after a traffic accident, insurers compensate not only the repair cost but also the depreciation due to the repair history, but certain policy conditions such as years since delivery and repair costs must be met.
For example, a person surnamed A filed a compensation complaint, saying the car's market value fell by about 17 million won due to a traffic accident, but the insurer determined the vehicle was not eligible because seven years had passed since delivery. Person B's vehicle was three years after delivery, but the repair cost was 2 million won, which did not exceed 20% of the pre-accident vehicle value (30 million won), so no compensation was paid.
The Financial Supervisory Service (FSS) also explained that the basis for compensation amounts for depreciation is not the used-car market price but the amount calculated according to the policy's payment standards. The rate is applied differentially: 20% of the repair cost for one year or less since delivery, 15% for more than one year and up to two years, and 10% for more than two years and up to five years. However, if a lawsuit is filed in court regarding depreciation loss, a court ruling may differ from the policy terms.