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Vehicle Insurance

To be protected, understand insurance for your car and motor vehicle

At present, there may still be many who do not know and prioritize auto insurance, such as cars. In fact, it can be said that a vehicle is the most obligatory thing to insure once you have it.

In addition to protecting vehicles, auto insurance also protects drivers against incidents that occur while operating a motorized vehicle, you know!

So how important is this insurance actually?

What is auto insurance?

According to the Financial Services Authority (OJK), motor insurance is the provision of benefits in the form of compensation for loss and/or damage to motor vehicles.

This includes those caused by collisions, falls, malicious acts, theft and also fire.

In Indonesia, the applicable traffic law also states that each driver should be responsible for the loss of other parties who are not at fault.

However, the general public buying insurance is not intended to protect against claims from other parties.

Generally they are more concerned with the need to maintain the vehicle in order to maintain a good physique.

Car insurance coverage

There are basic coverage conditions that can be covered by insurance, including :

  1. vehicle damage
  2. civil liability, which includes third party civil liability and passenger civil liability.

Insurance liability is also divided into two, namely :

1. Multi-risk or combined (all risks)

In this type of coverage, the insurance guarantees the overall risk of loss, whether small or large losses, including loss.

Even though the name is all-risk, not all vehicle conditions can be covered by insurance. This is because there are also risks that are excluded.

So why is this insurance called that? Indeed, the insurance offers liability guarantees against other parties or third parties.

Losses or damages that can be covered by insurance range from losses due to scratches, dents, loss of vehicle parts to total losses.

Each time a claim is submitted, the policyholder will be charged a separate risk fee depending on the condition of the vehicle.

Even so, the fees charged will still be cheaper than if you don't have insurance.

2. Total loss only (TLO)

TLO only offers a replacement guarantee in the event of damage to the vehicle equal to 75% of the value of the vehicle and losses due to the loss of the vehicle.

Since new replacements can be obtained after significant damage or loss, this type of cover is of course cheaper than the comprehensive type.

Usually, the bonus amount reaches 50% and even less than the global type bonus.

Calculation of car insurance premiums

As a policy owner, you are required to pay a premium amount to the insurance company that has accepted the risk for your vehicle.

The amount of the premium value is determined by the insurance company taking into account the condition of your vehicle, including :

  1. physical condition of the vehicle
  2. Vehicle type
  3. vehicle age
  4. place of use
  5. function and use
  6. the experience of loss events that have been experienced
  7. type of coverage

For TLO insurance premiums, the average car insurance rate is 0.8%-1%. For example, if you have a Toyota Avanza G/T Luxury for Rp. 193 million with an insurance rate of 0.8%, the fees to be paid are as follows :

  • 0.8% x IDR193,000,000.00 = IDR1,544,000.00

Meanwhile, the average all-risk auto insurance rate is 2.5% to 3.5%. Some insurers even provide an insurance rate of 1.5% for cars worth more than IDR 500 million.

If in the end you prefer comprehensive insurance at TLO with a car price of Rp. 193,000,000.00, let's take one of the 2.5% insurance plans for cars costing Rp. 150 million at Rp. 300 million.

Then the amount to be paid is: 2.5% x Rp. 193,000,000 = Rp. 4,825,000. The amount of TLO and all risk premiums above will always be added to the administrative costs. Usually the administration fee is less than IDR 50,000.

Based on the calculation above, the all-risk insurance premium is approximately 200% higher than the TLO.

It can be concluded that you have to pay more than three times the TLO insurance premium if you want to get an all-risk car insurance policy.

In automobile insurance, the premium must be paid in full within 14 days of the issuance of the policy. Otherwise, the insured is adjourned by the insurer without prior notification.

In the event of loss of the insured motor vehicle, the insured cannot file a claim and obtain compensation. The period will end 24 hours after receipt of the premium by the insurer.

If up to 90 calendar days from the issue of the policy, the premium is not paid by the insured, the policy will be automatically cancelled.

In the event of a declaration of loss, the insured must notify in writing or verbally followed by a written report if a loss occurs to the insured motor vehicle no later than 3 days after the loss.

Expansion of car insurance coverage

In addition to the guarantee of the main risks, the motor insurance can also be supplemented by additional guarantees, in the form of :

  • losses due to riots and riots
  • terrorist activities and floods
  • driver and passenger accidents
  • legal liability (TJH) for third party losses

By submitting a request for extended coverage, policyholders are required to pay an additional premium of a certain rate determined by each insurance company.

Risks not covered by car insurance

If you already know what can be covered by car insurance, now is the time for you to find out what risks cannot be covered. These are :

  1. intentional act of the insured
  2. violate road signs
  3. organize races, carnivals, campaigns and acts of crime
  4. driven by someone who does not have a driving license (SIM)
  5. tow another vehicle
  6. driven by someone who is under the influence of alcohol or illegal drugs is driven by force even if the vehicle is damaged or not roadworthy
  7. This insurance also does not cover loss and damage to additional equipment which is not stated in the policy, such as keys, vehicle registration certificates (STNK) and motor vehicle owner's books (BPKB) .
  8. theft of non-standard equipment
  9. damage or loss due to embezzlement
  10. overload
  11. enter or cross closed or prohibited roads
  12. nuclear radiation, radioactive contamination, nuclear reactions
  13. riots or disturbances of public order
  14. loading or unloading of goods

Choose good car insurance

Do you want vehicle insurance? Come on, pay attention to the following in order to get the best insurance :

  • specify and select the product that suits your needs
  • choose an agent who wants to help you and who has an agency certification
  • choose an insurance company registered and supervised by the Financial Services Authority (OJK)
  • complete the insurance closure request letter (SPPA) with the actual data
  • pay the premium immediately so that the vehicle is protected
  • make an extension before your policy expires

So, have you started thinking about the importance of car insurance, right? Have you decided to choose the right car insurance for you?


  • Secure your vehicle with insurance
  • How to calculate the right car insurance premium?