In a significant ruling on auto insurance liability, Korea’s Supreme Court held that a driver who caused an accident while driving without a license may be required to bear up to ₩100 million in reimbursement liability under voluntary insurance, and that such a clause is not unfair.

The decision draws a clear line between mandatory insurance limits and voluntary insurance responsibility.


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⚖️ Court & Case

Court: Supreme Court of Korea

Division: Civil Division 1

Decision Date: January 8, 2026

Case No.: 2025다215363

Result: Lower court reversed and remanded



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🚗 What Happened?

The driver (A) was operating a vehicle without a license.

He fell asleep at the wheel.

When police knocked on the window, he suddenly moved the vehicle and struck an officer.

The officer suffered:

A fractured leg

Six weeks of medical treatment



The vehicle was insured with:

Bodily Injury I (mandatory insurance)

Bodily Injury II (voluntary insurance)


The insurer, Hyundai Marine & Fire Insurance, paid approximately ₩22.79 million to the injured officer.


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💰 The Dispute

The policy provided:

Mandatory insurance accident charge limit: ₩3 million

Voluntary insurance accident charge limit: ₩100 million


The insurer sought reimbursement from the driver based on the policy.

The driver argued:

The ₩100 million clause was unfair.

It violated consumer protection principles.

Liability should be capped at ₩3 million.



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🏛 Lower Court Decision

The lower courts sided with the driver:

Limited liability to ₩3 million.

Found the ₩100 million clause invalid as excessively unfavorable.



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🧠 Supreme Court’s Key Ruling

The Supreme Court disagreed.

It held:

The ₩3 million cap applies only to mandatory insurance.

The relevant regulation does not extend to voluntary insurance.

The ₩100 million clause reflects:

Strengthened social responsibility for serious violations.

2020 revised standard policy language.



The Court emphasized:

Most insurers follow standardized terms approved by regulators.

Even switching insurers would not avoid similar provisions.

If the driver had only mandatory insurance:

He would still owe damages personally for amounts exceeding coverage.



Therefore:

> The high reimbursement amount alone does not make the clause unfair or socially unacceptable.




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📚 Legal Significance

This decision reinforces:

Stronger accountability for unlicensed or drunk driving.

Clear separation between:

Mandatory insurance regulatory caps

Contractual voluntary insurance terms


Courts will not lightly invalidate standardized insurance clauses.


The message is straightforward:

Drive without a license, and insurance will not shield you from financial consequences.

Article: https://www.lawtimes.co.kr/news/articleView.html?idxno=216271