car insurance

How To Calculate Premium Car Insurance Let Not Be Fooled

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In Indonesia, it seems that many people are not too aware of the importance of car insurance. In addition to many people do not know the functions and benefits, they are also still confused about the calculation of the cost of premium car insurance.

No need to be confused about car insurance premiums. In accordance with Circular Letter No. 21 / SEOJK.05 / 2015 from the Financial Services Authority. This premium car insurance rate is set according to applicable law.
car insurance
Before calculating the premium cost, first look at the types of vehicle insurance available. Currently, there are Total Lost Only (TLO) and All Risk / Comprehensive car insurance.

Everything is intended to protect from harm. But the coverage of protection between the two types of insurance is different. You can freely choose the vehicle insurance by adjusting the ability and needs.

Car insurance TLO

This type of insurance TLO just give a replacement in case the vehicle suffered severe damage above 70 %, or it can not be repaired again. This also includes a lost vehicle stolen.

If you buy a car on credit, this TLO insurance has become one with the first payment of the premium amount depending on the length of the credit period. Premiums will be lower, if the tenor of credit is faster.

All risk / comprehensive insurance

All risk insurance has a wider coverage coverage, both small and large damage. Minor damage such as abrasions caused by being grazed, or cracked car lights can be protected by this insurance.

The premium cost is higher than the TLO insurance. To be remembered, insurance companies are required to charge an additional premium. Ff the age of the vehicle is above five years with a minimum magnitude of five percent.


This possible also if you want to combine both types of insurance.
Let’s say. in the first three years you wear all risk insurance. But because the older the vehicle the more expensive the premium. In fourth year you want to switch to TLO insurance. It is fine to do.

How to calculate the premium car insurance ?

In accordance with the Circular Letter of OJK Number: SE-06 / D.05 / 2013 on the Determination of Premium Rates, the amount of premium depends on the area of ​​the vehicle in operation.

  1. Region I covers Sumatra and the surrounding islands.
  2. Region II covers Jakarta, Banten and West Java.
  3. Region III of all regions in Indonesia excluding Region I and II.

In addition to regional considerations, the sale price of vehicles also become a factor of insurance vehicle. The more expensive the price of the vehicle, the smaller the percentage of the premium.

Insurance companies are also required to apply an additional premium as a minimum risk cost of Rp 300 thousand per incident.

TLO insurance premium

Let’s say that Denny who lives in Jakarta just bought a car X worth Rp200 million. Not wanting to risk damage or loss, he insured his car with the TLO.

In accordance with OJK regulation, TLO insurance premium for car price range Rp125 million to Rp200 million in Jakarta is 0.44 – 0.53 percent. Car dealerships apply a premium of 0.49 percent.

Then the calculation is:
0.49 percent x Rp200 million = Rp980 thousand

If one day Denny suffered unfortunate until the car wrecked, the insurer will compensate for the price of the car he bought at that time.
The question is, until when does this TLO insurance apply?
The validity period of this TLO insurance is usually one year. The guarantee money will continue to decrease in the following year.
Because the value of cars shrink every year.

All risk insurance premium

Another story, if Denny insured his car with all risk insurance. In addition to the paid premium is also greater, the benefits are more extensive.

The amount of all risk insurance premium for the price of Rp200 million cars in the Jakarta area is 2.47-2.72 percent. Let’s say, the dealer set the insurance premium of 2.5 percent. Then Denny must pay Rp 5 million per year for insurance.

For example the Denny bumper of a car is hit by a motorcycle. Because he does not insure his car at all risk, then Denny should be out of own expense of:
– The cost of bumper repair Rp 500,000
– Paint Rp 500,000

Without insurance, Denny must pay Rp 1 million for car repairs. Meanwhile, with all risk insurance, Denny paid enough Rp 300 thousand per incident as a risk expense.


Expansion of Coverage

You can also ask for extension of coverage to the insurer. But, certainly not free.

For example, because in Jakarta, there are often demonstrations. You want to protect your car for fear of being ruined by the masses.
You simply pay 0.05 percent for All Risk insurance or 0.35 percent for TLO insurance. But the minimum premium rate according to OJK regulation, the amount will depend on the insurance company selected.

Expansion of these dependents can also protect the vehicle from events such as:

  • sabotage,
  • terrorism,
  • and personal accidents of passengers usually not covered by motor vehicle insurance.

Now you already know the formula and rate of your car insurance premium. Now there is no longer a story of fuss or protest at the insurance because they feel “robbed”. All already have rules of the game and are protected by law, so no one is harmed


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