Car Insurance in Indonesia

Car insurance is a protection service provided by an insurance company for your car. Car insurance provides protection for private cars or commercial use from various risks such as accidents, natural disasters, fire, damage or riots.

Is car insurance mandatory in Indonesia?

WHO pointed out that traffic accidents are Indonesia’s third leading killer, second only to coronary heart disease and tuberculosis. According to the Indonesian National Police, 109,038 accidents occurred in 2012. Human negligence is the main factor in the accident. Understandably, this factor not only comes from us, but also from other people. On the street, the negligence of others may be against us. Even if someone is driving methodically, he may be a victim because of Lure's driver.

The risk of injury or death can be reduced by improving safety, but the risk of damage to the vehicle is inevitable whether it is minor or severe damage. This is what makes our vehicles (cars in this case) need insurance. Moreover, even if the damage is only the wear on the car, it will cost a lot.

The accident is not the only cause. Vehicle theft is increasing every day. Not only in big cities, but small and quiet places are often targets of crime. The risk of losing a vehicle continues to increase. Therefore, if someone decides to insure their car, it is very logical. Therefore, in addition to car insurance, you also need to consider purchasing travel insurance, health insurance and other insurance products that can ensure safety while driving. Just like applying for an online loan, you can apply for travel insurance products through a mobile application or directly through the website.

What are the benefits of having car insurance（asuransi mobil）?

If you have applied for a new car loan or a used car loan, then here are some advantages and why it is important for you to have the best car insurance:

1. Maximum vehicle protection:

By purchasing car insurance, you will get protection facilities in terms of maintenance or accidents.

2. Compensation:

If your vehicle is damaged, lost or stolen, the insurance company will compensate you with a large enough amount based on the premium amount in your policy to minimize the loss.

3. Maintenance investment:

When the price of car insurance is competitive, having car insurance will allow your vehicle to get greater maintenance with less damage. Resale will increase the price because your car is better maintained and insured.

What types of car insurance are there?

1. All risks car insurance:

All risks can be interpreted as "all risks". This type of insurance is also called comprehensive insurance. This means that insurance will cover all types of damage, from minor damage to major damage to loss. Compared with TLO, only a little bit is scratched on the car, and the insurance will pay the insurance claim. Just all risk auto insurance financing is more expensive than TLO.

2. TLO car insurance (only for total loss):

Total loss only (TLO) literally means "total loss only (if any)". This means that insurance claims can only be made in the case of "total loss". In auto insurance, total loss refers to more than 75% of losses or losses due to theft or looting. If you suffer less than the loss, you will not get compensation. The 75% benchmark is used because the car is unusable. The advantage is that the TLO insurance premium is lower than all risk car insurance.

In these two types of insurance, the cost of all risk insurance is much higher than TLO, especially if the scope of protection is to be increased. If your car is expensive, it will cost a lot even if it is slightly damaged, and you should choose all risks. This type of insurance is also suitable for car rental business or car courses because the risk of minor damage is high. The frequency of car use affects the type of insurance to be purchased. The more you use it, the greater the possibility of an accident. In addition, if the frequently used route is a fixed route. Likewise, all risks are a choice.

How to calculate the car insurance premium?

When calculating auto insurance, the premium amount paid every month is calculated based on the pure premium amount + the existing extended premium amount. The formula is as follows:

Pure premium = car price x premium rate (based on category, insurance type and region)

Expansion fee = car price x expansion fee rate (based on the selected expansion type)

For more detailed information, we can see from the calculation example below:

If you want to insure your vehicle with all risks car insurance. The car you own is Toyota Agya and the price is IDR 120,000,000. With license plate "B" (Jakarta DKI). You decide to add Flood and Riot Prevention Expansion (SRCC), then the monthly premium you have to pay is:

Net premium = IDR 120,000,000-x 3.59% = IDR 4,308,000

Extended premium:

Flood expansion = IDR 120,000,000-x 0.125% = IDR 60,000

Riot expansion = IDR 120,000,000-x 0.05% = IDR 60.00

The total insurance premiums you must pay for a year are:

IDR 4,308,000-IDR 60,000-IDR 60,000-= IDR 4,428,000

Choose insurance type

When you want to insure motorcycles, the main factor to consider is the brand of the insurance company you will choose. By understanding the insurance company, you can understand whether the insurance provided is good. As long as you are fit and familiar with tracking records, you can consider it, it does not need to be expensive.

Generally, insurance companies provide two types of motorcycle insurance, the first is TLO (total loss only), and the second is "all insurance".

The second type of insurance not only provides compensation for motorcycle loss (loss), but also covers other disasters or losses, such as motorcycle/car damage. Essentially, all insurance types that take place for your vehicle with all-risk insurance types will be compensated under the applicable terms and conditions.

However, usually not all insurance companies provide both types of insurance. Usually, only TLO insurance is provided. However, TLO insurance is usually added together with personal accident insurance, or translated as personal accident insurance.

But you need to remember that you should still drive safely and be careful. The message "Keeping healthy is better than curing" also applies to your motorcycle users. Therefore, please comply with all applicable regulations and put safety first.