CONTENTS
- 1. Insurance Proceeds Dispute, What Were the Detailed Circumstances?
- - Information and Precedents Related to Insurance Proceeds Disputes
- 2. Insurance Proceeds Dispute, What Was the Court's Determination?
- 3. Insurance Proceeds Dispute, What Was Daeryun's Strategy?
1. Insurance Proceeds Dispute, What Were the Detailed Circumstances?
In connection with this insurance proceeds dispute, the spouse of the plaintiff, A, was driving A's vehicle when the spouse collided with B.
Because of this accident, A sent the vehicle in for repairs and used another vehicle of A's own for 77 days, until the repairs were completed and the vehicle was returned.
Accordingly, OO Insurance, the automobile insurer with which A was insured, filed a reimbursement claim against the insurer with which B held liability insurance, and the court found A's side to be 40 percent at fault and B's vehicle to be 60 percent at fault.
Meanwhile, the automobile insurance policy terms applied by the insurer of B's vehicle contained the following standards for payment of property damage compensation.
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A argued that, because A could not use A's own vehicle as a result of this accident and did not rent a substitute vehicle, the insurer should compensate A for the loss equivalent to the substitute vehicle rental cost. A argued that the amount of this loss should be calculated based on the rental fee for a vehicle of the same type as A's vehicle and the amount obtained by applying B's percentage of fault.
The insurer, however, argued that the amount should be calculated based on the one-day rental fee for the lowest-priced rental vehicle of the same class as A's vehicle, and a dispute arose.
Information and Precedents Related to Insurance Proceeds Disputes
Where a party to a traffic accident is insured, the policyholder claims insurance proceeds from the insurer. At this point, the insurance company may pay the proceeds, but it may also refuse to pay them.
If the insurer has refused to pay the insurance proceeds, the policyholder may bring a 🔗insurance proceeds claim action against the insurer.
In addition, if a vehicle requires repair because of a traffic accident, and one wishes to claim the costs incurred by renting a vehicle in the meantime, one may request payment of the substitute vehicle rental cost.
Although the standard for payment of substitute vehicle rental costs for accident damage under the standard automobile insurance policy is a "vehicle of the same class," there have been many instances of controversy where judgments have ordered payment of a substitute vehicle rental cost for a "vehicle of the same type."
A vehicle of the same class means a vehicle with a similar engine displacement and model year.
In fact, in January 2022, the owner of a damaged Audi A6 vehicle was involved in a traffic accident and rented a BMW 520, but the at-fault driver's insurer argued that the substitute vehicle rental cost should be calculated using a Sonata, a vehicle with a similar engine displacement and model year. The court, however, held that factors such as the value of the vehicle and the brand value should also be considered in addition to engine displacement and model year, and ruled that the substitute vehicle rental cost should be paid based on the BMW 520d.
Where a victim seeks payment of a substitute vehicle rental cost for using an alternative means of transportation on the ground that the victim was unable to use the vehicle during the period of repairing the vehicle damaged by the accident, the tortfeasor has an obligation to compensate, within a reasonable scope, the costs actually borne by the victim in using such alternative means of transportation, provided that there was a need for the victim to use another alternative means of transportation.
- See Supreme Court, Decision of February 15, 2013, 2012 Da 67399, among others |
2. Insurance Proceeds Dispute, What Was the Court's Determination?
The district court that heard the case related to this insurance proceeds dispute ruled in favor of the insurer.
During the vehicle repair period, A used a vehicle that A owned, so A incurred no separate cost in using an alternative means of transportation.
A argued that A had spent fuel costs while using the substitute vehicle, but the court regarded these costs as costs that A would have incurred even if the accident had not occurred and did not recognize them.
A also argued that A's commuting time had increased as a result of using the substitute vehicle, and that the resulting loss of time should be included in the amount of the substitute vehicle rental cost loss; however, the court determined that this loss had no direct causal relationship with the accident and did not recognize it either.
In the end, the court granted only part of the amount of the substitute vehicle rental cost loss that A had claimed.
3. Insurance Proceeds Dispute, What Was Daeryun's Strategy?
In connection with this insurance proceeds dispute, we have analyzed a district court judgment that granted only part of the automobile insurance substitute vehicle rental cost claimed by the plaintiff, because the losses for fuel costs and commuting time were not recognized.
As electric and eco-friendly vehicles have recently increased in number, disputes with insurers are rising because such vehicles do not fit the insurance substitute vehicle rental cost standards, which were designed around internal-combustion sedans in the past.
Accordingly, the financial authorities have announced that they will improve the automobile insurance substitute vehicle rental cost standards.
In automobile insurance, the burden of proving the need for a substitute vehicle and the substitute vehicle rental cost lies with the victim, so we recommend claiming the amount with the legal assistance of an attorney experienced in these matters.
The 🔗Drunk Driving and Traffic Accident Response Group of Daeryun Law Firm LLP also actively assists traffic accident victims with their insurance claim litigation.
While insurance proceeds are generally distributed according to the percentage of fault, if you would like a higher amount or greater compensation, you are welcome to request a legal consultation with Daeryun Law Firm and prepare the litigation together.
