Even as vehicle prices rise, auto insurance customers are increasingly buying higher coverage limits while paying less in premiums, reflecting a clear shift toward cost-conscious policies. Wider use of non-face-to-face sales channels and discount riders is helping drivers pursue both stronger protection and lower costs.
According to the Korea Insurance Development Institute on Monday, its analysis of 2025 private passenger auto insurance policies found the average insured value of new cars rose to 52.43 million won in 2025 from 48.47 million won in 2023. As values climbed, 85% of policyholders carried property-damage liability limits of at least 300 million won, and 51% carried limits of 1 billion won or more. Comprehensive coverage for damage to the insured vehicle was purchased by 85.8% of drivers. Among electric-vehicle owners, the take-up rate reached 96.1%, reflecting battery replacement costs and the risk of total loss.
The institute said the move toward higher coverage appears tied not only to higher vehicle prices but also to growing repair burdens driven by rising parts costs and labor rates.
Sales channels are also shifting quickly toward online purchases. The share of policies sold through CM (online) channels, which tend to offer lower premiums, reached 51.4%, well ahead of in-person sales at 31.7%. Among drivers in their 30s, CM usage was 69.1%. The institute said online enrollment is also increasing among those 60 and older, narrowing the gap between channels.
Discount riders have effectively become standard. The mileage-based discount rider had an enrollment rate of 88.4%, and 66% of those enrolled met the refund threshold, receiving an average refund of 133,000 won. The refund amounted to about 10% of total premiums.
Discounts for advanced safety features are also expanding. Installation rates for automatic emergency braking and lane-keeping systems rose to about 44% each, and insurers are continuing to broaden eligibility for discounts.
At the same time, the share of policyholders in preferred rating tiers that qualify for premium discounts increased to 89.5%. “The tendency to consider both expanded coverage and premium savings at the same time is strengthening,” the institute said.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.