New '8-Week Rule' for Auto Insurance Takes Effect on September 10

Starting September 10, a new regulation known as the '8-week rule' will require minor injury patients to undergo a review if they need treatment exceeding eight weeks following a traffic accident. The aim is to reduce excessive long-term treatment costs and alleviate the burden of rising auto insurance premiums. However, there are concerns that this could lead to a balloon effect, with increased focus on intensive treatment or higher injury classifications within the eight-week period.

According to the insurance industry, the revised enforcement decree of the Automobile Damage Compensation Guarantee Act will take effect on September 10, applying to accidents occurring after that date.

Under the new system, minor injury patients classified in injury grades 12 to 14 will need to provide documentation proving the necessity for treatment beyond eight weeks, including details on the severity of their injuries and treatment progress.

If patients submit the required documentation to their insurance company within seven weeks of the accident, the insurer will forward it to the Automobile Damage Compensation Promotion Agency (ADCPA). The ADCPA will review the necessity for long-term treatment and appropriate treatment duration within seven days of receiving the documentation, notifying both the patient and the insurer. Patients who disagree with the decision can request a re-evaluation from the Dispute Mediation Committee within seven days of receiving the notification.

Patients seeking treatment beyond four weeks will still need to submit a medical certificate as required by the insurer. However, the process has been strengthened to include additional reviews by the ADCPA for those needing treatment beyond eight weeks.

The government has established this review process due to the rapid increase in treatment costs for minor injury patients. According to the Ministry of Land, Infrastructure and Transport, the number of minor injury patients decreased from 1.554 million in 2019 to 1.488 million in 2024. In contrast, treatment costs rose from 1 trillion won to 1.41 trillion won during the same period, reflecting an average annual increase of 7.0%.

Auto insurance profitability is also declining. The Financial Supervisory Service reported that the loss ratio for auto insurance rose from 80.7% in 2023 to 83.8% in 2024, and further to 87.5% in 2025. The insurance industry shifted from a profit of 553.9 billion won in 2023 to a loss of 9.7 billion won in 2024, with losses expanding to 708 billion won last year.

The Insurance Research Institute estimates that if the 8-week rule is successfully implemented, excessive long-term treatment could decrease, improving the loss ratio by 2 to 3 percentage points. Considering that the annual gross premium for auto insurance is around 20 trillion won, a 3 percentage point reduction in the loss ratio could lower insurance payouts by approximately 600 billion won. However, actual premium rates are also influenced by accident rates, maintenance costs, and parts prices, meaning that improvements in the loss ratio may not directly lead to lower premiums.

It is expected that it will take time to assess the practical effects of the new system. The new regulations will only apply to accidents occurring after September 10, and there may be a balloon effect where patients increase the number of treatments or utilize expensive procedures within the eight-week period before being subject to review.

There are also concerns that the number of patients diagnosed with grade 11 injuries may increase. Patients diagnosed with conditions such as concussions or herniated discs may avoid the 8-week rule, potentially leading to higher injury classifications. However, actual changes in diagnoses and insurance claims will need to be confirmed through statistics after the implementation of the new system.

Critics have raised concerns that patients' rights to treatment may be compromised. Even within the same injury grade, recovery times can vary based on factors such as age, pre-existing conditions, and disabilities, raising questions about the appropriateness of a uniform treatment duration for assessing the need for long-term care. The procedures for patients who fail to submit documentation on time or are denied recognition of their need for long-term treatment will also need to be evaluated to ensure the system's effectiveness.

As a result, experts suggest that in addition to monitoring the number of long-term treatment patients, it is essential to examine the treatment costs and frequency of visits for patients within the eight-week period, as well as the proportion of patients by injury grade, to assess the effectiveness of the new system.

An industry representative stated, "We need to look not only at whether the number of long-term treatment patients decreases but also at whether the frequency of visits and treatment costs for patients within eight weeks, as well as the number of grade 11 diagnoses, are increasing. It is necessary to develop supplementary measures based on the results of the implementation to prevent balloon effects or new forms of insurance payout leakage."