The Ministry of Climate, Energy and Environment is introducing a policy-based insurance scheme, Electric Vehicle Fire Safety Insurance, to compensate for third-party damage caused by electric vehicle (EV) fires.
Under the proposal, coverage of up to KRW10bn ($6.9m) will be provided per incident if a fire that occurs while an EV is parked or charging causes damage to nearby vehicles, property or facilities.
The insurance scheme will operate as a policy-backed programme for three years starting in 2026. Premiums will be shared between the government and EV manufacturers and importers, with the government allocating KRW2bn this year to support preparations for the initiative.
Coverage will apply to EVs sold by participating manufacturers or importers and registered within the past 10 years.
Vehicle owners will be automatically included in the scheme without the need for a separate registration process.
The scheme will compensate third-party property damage caused by EV fires that occur while vehicles are parked or charging. Coverage is capped at KRW10bn per incident, with an annual aggregate limit of KRW30bn.
The programme is designed to complement existing insurance arrangements. Policies such as motor insurance or product liability insurance will be applied first, with the new scheme covering any shortfall in compensation.
From 2026, the government will require manufacturers and importers whose vehicles receive EV subsidies to participate in the insurance programme. Companies that do not join the scheme will no longer be eligible for subsidies from July 2026.