The Supreme Court has ruled that a driver who caused a traffic crash with shared fault can claim from the other party's insurer the auto insurance deductible the driver paid.
The Supreme Court's First Division (Presiding Justice Shin Suk-hee) on the 29th reversed a lower court ruling that had found for the defendants in a damages suit filed by a person identified as A and others against six domestic non-life insurers, and remanded the case to the Suwon High Court.
After traffic crashes in which the other drivers were also at fault, A and others were not compensated by the insurers with which they held driver insurance for the deductible (up to 500,000 won) from their vehicle repair bills. They then filed separate suits against the other vehicles' insurers seeking payment of their deductibles.
These suits were based on a past Supreme Court ruling. Earlier, in 2015, the full bench of the Supreme Court held that where only part of insurance proceeds were paid, an insured may first seek performance of liability for damages from a third party with respect to losses not covered by insurance proceeds ("uncompensated loss").
The issue in the case brought by A and others was whether deductibles could be deemed "uncompensated loss" and claimed against the insurer with which the other driver was insured.
The trial and appellate courts ruled for the defendants. They found that because the plaintiffs themselves entered into their own vehicle insurance contracts that included a deductible agreement, they could not seek damages from the other insurers.
The Supreme Court, however, found that the portion of the deductible corresponding to the other party's share of fault can be claimed separately from the other insurer. The court said, "If we do not recognize the insured's claim against a third party for the portion of the deductible corresponding to the third party's share of responsibility, there is a concern that, in some cases, the third party will be relieved of part of the liability for damages."
The court also said that for the "pre-settlement method," in which an insurer deducts the deductible and pays the remainder as insurance proceeds before the shared fault ratio is finalized, "it is desirable that policy terms clearly specify in advance how the deductible borne by the insured will be handled."
The Supreme Court said that insurers should establish a contractual basis in the policy terms so that the own-damage insurer can receive and refund to the insured the portion of the deductible corresponding to the other party's share of responsibility on the insured's behalf, and should explain these matters so the insured can clearly understand them.