Is Jeonse Deposit Insurance Worth the Cost?
Jeonse deposit insurance — offered by HUG (Korea Housing Finance Corporation) and SGI Seoul Guarantee — protects tenants by guaranteeing refund of the lump-sum jeonse deposit in the event the landlord defaults, goes bankrupt, or the property is foreclosed. For a 300 million KRW deposit on an apartment, the annual premium is roughly 384,000 KRW — less than 0.13% of the deposit amount.
The decision to purchase insurance comes down to risk versus cost. If the property has significant existing mortgages, a high deposit-to-price ratio, or a landlord with multiple financed properties, the small premium can protect you from a catastrophic loss. Even for lower-risk contracts, the peace of mind and legal guarantee often justify the modest cost. Note that not all properties qualify — eligibility depends on the deposit amount and property type.
Frequently Asked Questions
HUG covers jeonse deposits up to 700 million KRW for apartments in the Seoul metro area and up to 500 million KRW in other regions. SGI Seoul Guarantee may cover different amounts — check current terms before applying.
The tenant pays the premium in most cases. Some landlords agree to split the cost as a condition of the lease, but this is negotiated between the parties.