Unlicensed driver who said "I can't pay" after crash must reimburse insurer in full, Supreme Court rules

An unlicensed driver who caused a traffic accident must bear the full amount of compensation that the insurer paid to the victim, according to a final ruling by the Supreme Court of Korea. The top court overturned lower court decisions that had accepted the driver's argument that the accident-sharing payment was excessive.
According to the legal community on the 18th, the Supreme Court of Korea's First Division, presided over by Justice Noh Tae-ak, reversed a lower court ruling that had partially upheld Hyundai Marine & Fire Insurance's recourse claim against its auto insurance policyholder, identified as A, and remanded the case to the Suwon District Court.
In January 2022, A was driving without a license in Hwaseong, Gyeonggi Province, when he fell asleep at the wheel. After receiving a report of suspected drunk driving, a police officer, B, arrived at the scene and knocked on the car window. A woke up and suddenly accelerated, hitting officer B, who was standing in front of the vehicle. B suffered a broken nose and other injuries requiring six weeks of medical treatment.
Hyundai Marine & Fire Insurance paid a total of 22.79 million won to the injured officer, covering medical expenses and a settlement. Relying on its policy terms on accident-sharing payments for unlicensed driving, the insurer then filed a recourse lawsuit against A, seeking reimbursement of the full amount. Under those terms, policyholders involved in accidents while unlicensed or driving under the influence must pay a specified accident-sharing amount to the insurer.
A countered that "the relevant policy clause is unilaterally disadvantageous to customers and violates the Act on the Regulation of Terms and Conditions." Both the trial court and the appellate court sided with A. They found that the clause violated the principle of good faith, lacked fairness, and ran counter to the purpose of the relevant statutes, and therefore limited A's liability to 3 million won.
The Supreme Court of Korea, however, reached a different conclusion. It focused on the fact that the Financial Supervisory Service (FSS) has repeatedly revised the standard auto insurance terms to raise accident-sharing payments, aiming to heighten awareness of the risks of unlicensed and drunk driving and to strengthen drivers' responsibility.
The bench stated that "the policy clause in question cannot be considered to violate relevant laws or the principle of good faith in a way that deprives it of fairness," and held that the insurer's exercise of its right of recourse was lawful. As a result of this ruling, unlicensed drivers now face heavy financial liability for the full amount of compensation paid out by their insurers.
kyu0705@fnnews.com Kim Dong-gyu Reporter