If you plan to drive in Korea as a foreigner, signing up for foreigner car insurance is mandatory. Whether you rent a car or buy a used one, driving without insurance means you absorb both legal liability and massive repair bills. Below is a one-stop guide covering mandatory insurance types, CDW options, required documents, and accident handling procedures.
Foreigner Car Insurance ① — Rental Car Insurance Options
Basic Liability Coverage for Rental Cars
When you rent a vehicle from a Korean rental company, basic liability insurance is included by default. Under Korea’s Road Traffic Act, Personal Liability 1 (basic) and Property Damage liability are mandatory line items. However, basic liability alone rarely covers damage to the rental vehicle itself, and property damage is capped at a limited amount.
Collision Damage Waiver (CDW)
If a rental car is damaged in an accident, CDW (Collision Damage Waiver) limits your out-of-pocket cost to a fixed deductible. For example, on KRW 2,000,000 in repair costs, a CDW-enrolled driver pays only a KRW 300,000 deductible and the insurer covers the rest. Standard, Super, and Premium tiers each carry different deductibles, so CDW is strongly recommended for new drivers and foreigners. For related info, also see 15 Must-Have Apps for Foreigners in Korea.
Other Add-ons: Loss-of-Use Waiver and Single-Vehicle Accident Coverage
Some rental companies offer a “loss-of-use waiver” (covering the rental company’s lost revenue while the car is being repaired) or “single-vehicle accident coverage” (for accidents without a counterparty, such as guardrail collisions) as separate add-ons. Choose options based on your travel budget and driving experience. For related info, also see Complete Guide to Making Korean Friends.
Foreigner Car Insurance ② — Mandatory Coverage When Buying a Used Car
Liability Insurance (Personal Liability 1 and Property Damage) Required
The moment you own a vehicle in Korea, the minimum liability insurance is a legal obligation. Personal Liability 1 (up to KRW 150 million per person) and Property Damage (KRW 100 million standard) are mandatory line items. Failing to enroll can result in fines and criminal liability. When taking over a used car, the previous owner’s policy is not transferred, so you must enroll under your own name before vehicle delivery.
Comprehensive Insurance: Personal Liability 2, Self-Injury, and Own-Damage
A comprehensive policy that adds Personal Liability 2 (unlimited), Self-Injury, and Own-Damage coverage handles most of the cost when a traffic accident occurs. Even though premiums rise slightly, weighing that against the risk of paying hundreds of millions of won per accident makes comprehensive coverage much safer. Foreigner car insurance is generally recommended as a comprehensive plan.
Enrollment Procedure and Required Documents for Foreigner Car Insurance
| Document | Purpose | Note |
|---|---|---|
| Passport | Identity verification | Required |
| Alien Registration Card (ARC) | Residency status check | Required |
| Korean driver’s license | Proof of driving qualification | Required when buying a used car |
| Vehicle registration certificate | Vehicle information check | Required |
If you have overseas driving experience, some insurers may credit it, though document submission can be complex. Set up your policy through online portals or foreign-language-capable agencies and call centers, and after signing make sure to keep your insurance certificate or QR code (e-certificate).
- Mileage rider: Premium refund when annual mileage is under 5,000 km
- Dashcam discount: 3–5% discount when proof of installation is submitted
- Driving history proof: Submitting overseas DMV records can lower premiums compared to new-driver rates
- Safe-driving score (T map): Discount rider based on T map navigation app driving records
Reporting Order and Handling Steps When an Accident Occurs
- Safety measures: Turn on hazard lights and move to a safe zone. Call 119 if there are injuries; police is 112.
- Document the scene: Photograph and video the damage points and road environment. Exchange the other vehicle’s plate number and contact information.
- Contact your insurer: File the claim through the 24-hour customer center. Translation support can be requested.
- Repair, settlement, and compensation: Use insurer-designated repair shops. With comprehensive insurance, the personal and property liability insurer handles most of the process.
For a more detailed response order after a traffic accident in Korea, see Complete Guide to Foreigner Traffic Accident Response.
Foreigner Car Insurance: The Right Choice Is the Start of Safe Driving
Whether you drive a rental or a used car, in Korea foreigner car insurance is both a legal obligation and a financial safety net for every foreign driver. A comprehensive plan that adds Own-Damage and Personal Liability 2 on top of the mandatory liability insurance is the safest, and for rental cars you must always check the CDW option. Cut premiums by installing a dashcam and using mileage riders, and when an accident happens prioritize securing scene photos and paperwork first. You can also check insurer comparison quotes at Korea Insurance Development Institute.
The same car and the same age can carry very different premiums. Knowing what moves the number shows you where it can come down.
- Claims-free history (the discount/surcharge grade) — the largest variable. Enrolling for the first time in Korea means starting with no history, and therefore a high premium.
- Your claims-free record from home can sometimes count. Obtain an English no-claims certificate from your previous insurer and submit it; the grade may be adjusted. Always ask whether your insurer accepts this — it can change the premium substantially.
- Driver scope and age limits — restricting cover to yourself, or to a couple, lowers the premium. But an accident while someone outside that scope is driving is not covered.
- Deductible level — setting it higher lowers the premium and raises what you pay when something happens.
- Mileage, dashcam and safety-feature discounts — simply asking which riders you qualify for takes several percent off.
The channel matters too. Direct online policies are generally cheaper, but Korean-language interfaces and identity verification are the barrier. Going through an agent costs a little more and often resolves the document problems specific to foreign residents — enrolling through a person the first year and moving online afterwards is a practical compromise.
What the Policy Actually Does When You Crash
Plenty of people hold a policy and then freeze when something happens. Learn the order.
- People first, then photos. Call 119 if anyone is hurt. Before moving the car, photograph the scene, both plates and the damage.
- File with your insurer. The claim number on your policy brings a roadside team. Get the claim reference — hospitals and repair shops will ask for it.
- Collect the other party’s details. Name, contact, plate number, insurer. If language fails, photograph each other’s licence and insurance card.
- Hospital the same or next day. Create a medical record even without pain; going days later makes the link to the accident harder to establish.
- No cash settlements at the scene — and where anyone is injured, insurance and police, always.
You are not obliged to accept the fault ratio an insurer proposes. If it does not make sense, ask for the basis and secure dashcam footage or nearby CCTV. Most CCTV overwrites within days, so timing is everything. Where no agreement is reached, you can ask your insurer to submit the dispute for deliberation.
Frequently Asked Questions
Can I get insured on an international driving permit?
For rentals, an IDP presented with your home licence is enough. Buying your own car and insuring it is different — some insurers require a Korean licence. If you are planning a purchase, look into converting to a Korean licence first; everything afterwards is easier.
What happens if I drive uninsured?
Driving without the compulsory liability policy is itself a finable offence and the vehicle may not be operated. The larger exposure is an accident: injury compensation becomes your personal debt in full, alongside criminal liability, and it can affect your residence status. Compulsory cover must be maintained even while the car sits unused, so ask your insurer how to handle a long absence abroad.
How do I close out insurance when I leave Korea?
Selling the car means cancelling the policy and reclaiming the unused premium. Order matters: confirm the title transfer has completed before cancelling. Cancelling while the car is still registered to you leaves an uninsured vehicle in your name.
Also get your no-claims record issued in English before you go. It can earn you a better grade when you insure a car at home or elsewhere, and requesting it after departure is far more trouble.
Can I borrow a friend’s car for a day?
It depends on how the owner’s policy sets its driver scope. If it is limited to the owner, or to a married couple, an accident with anyone else driving is not covered. Owners frequently do not know this themselves, so check before borrowing.
For short periods, a temporary driver extension rider can be added by the day. The owner arranges it through their insurer’s app or by phone in a few minutes, and it costs little. For a move or a trip, that is the normal way to do it.
First-time enrollment is expensive mainly because there is no history behind it. Try in this order: submit a no-claims certificate from home (the biggest effect), then restrict the driver scope, then raise the deductible. Ask about dashcam and mileage riders too.
What is not worth doing is cutting cover to cut the premium. On bodily injury liability especially, the saving from a lower limit is far smaller than the exposure from a single accident. Trim collision cover or optional riders — not the liability limit.
Last updated: 16 September 2026
Coverage, premiums and eligibility differ by product and by date. This article is general information — it is not a recommendation to buy a particular policy and it does not guarantee any coverage. Read the policy documents before you sign up; for National Health Insurance, call 1577-1000.
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