April 29, 2025 (SEOUL) – Consumers Korea, with the help of Solutions for Our Climate (SFOC), is calling on regulators to examine the role of insurance companies in both worsening the climate crisis and denying compensation for its consequences.

On April 29, Consumers Korea submitted a petition to South Korea’s Fair Trade Commission requesting a review of standard auto insurance policies that exclude coverage for damage caused by floods, typhoons, and other natural disasters. The petition targets five major insurance companies in Korea: Samsung Fire & Marine Insurance, Hyundai Marine & Fire Insurance, DB Insurance, Meritz Fire & Marine Insurance, and KB Insurance. 

These exclusions, typically classified under “Acts of God,” are being challenged as outdated and unjust in the face of accelerating climate disasters. What makes this case especially significant, advocates say, is that the insurers denying compensation are also financially supporting fossil fuel industries, directly contributing to the climate crisis. 

Wildfires Highlight Growing Costs of Climate Inaction 

The petition comes just weeks after South Korea endured one of the most devastating wildfires in its history. From March 21 to 30, 2025, wildfires scorched around 104,000 hectares of land—over 1.6 times the size of Seoul—destroying over 4,000 homes and 2,000 agricultural facilities and displacing more than 30,000 people. The fires claimed 31 lives, with 75 total casualties. 

Similarly in January 2025, Los Angeles (LA), California was ravaged by wildfires that burned down the largest urban area on record, destroying over 12,000 structures. AccuWeather estimates total damage between $250 billion and $275 billion. South Korea’s DB Insurance, one of the companies named in the current petition, holds 37 active policies in the affected LA area, with projected losses of over $40 million (around 50 to 60 billion won). 

These consecutive wildfire disasters underscore the urgency of the issue—and highlight the potential global significance of this case. 

Insurers’ Fossil Fuel Investments Under Fire 

Even as insurers limit payouts for climate-related damage, they continue to back fossil fuel expansion. From 2020 to 2023, South Korea’s top 10 non-life insurers are estimated to have indirectly contributed 400,000 tons of CO₂ per year through insurance underwriting of coal plants according to a report by SFOC. Their financial investments in fossil fuel industries account for an estimated 26 million tons of annual emissions—roughly 4% of South Korea’s national total. 

Advocates argue that such double standards—profiting from carbon-heavy industries while pushing the cost of climate damage onto consumers—are not only hypocritical but economically short-sighted. As climate disasters become more frequent and intense, insurers themselves are exposed to rising liabilities and policyholder unrest. 

“The insurance industry is caught in a vicious cycle where it exacerbates the climate crisis while also facing increasing risks of losses from it,” said Donghyun Go, Head of Climate Finance at SFOC. “To break out of this cycle, we must start by ending operational insurance for coal power and rapidly reduce investment and underwriting for the fossil fuel industry.” 

“It is unfair for insurance companies, which are contributing to the acceleration of the climate crisis, to shift responsibility for vehicle damages caused by the climate crisis onto consumers by labeling them as 'natural disasters.' Therefore, there is a need to revise the relevant policy terms. In particular, non-life insurance companies that invest in corporations accelerating the climate crisis, such as those involved in coal power, must take responsibility for their role in the climate crisis. The current structure, in which the burden of damages from climate disasters is passed onto consumers through measures like premium hikes, is extremely unjust,” said Myung Yoon, Secretary General of Consumers Korea. 

Toward Fairer Risk Sharing 

The petition asks the Fair Trade Commission to invalidate exclusion clauses that deny compensation for climate-related disasters and calls for reforms that reflect the realities of a warming planet. 

Attorney Young-Ju Lee from the law firm Yoo, representing the claimant, explained that "Exemption clauses in insurance policies have been socially accepted based on the premise that natural disasters are beyond human control, taking into account insurers' need for predictability and management stability," and added, "However, it is necessary to question whether it is reasonable for consumers to bear all the losses for the sake of insurance companies, which bear some responsibility for the increase in natural disasters due to the climate crisis." 

ENDS.  

Solutions for Our Climate (SFOC) is an independent nonprofit organization that works to accelerate global greenhouse gas emissions reduction and energy transition. SFOC leverages research, litigation, community organizing, and strategic communications to deliver practical climate solutions and build movements for change.     

For media inquiries, please reach out to Yi Hyun Kim, Communications Officer, yihyun.kim@forourclimate.org.