Car insurance companies have two kinds of insurance services for the car, the comprehensive / all risk and total loss only. Each service has a different feature, but equally useful.
All risk insurance protects the car from the risk of abrasions until it is gone. While total loss insurance only guarantee losses due to loss and damage of more than 75 percent until the car can not drive anymore.
Because of the difference in dependents, the premium paid is different. Looking at the wider coverage of all risk insurance, the premium is bigger than the total loss only.
But the amount of this premium is commensurate with the benefits received by the policyholder. Because if the car is not covered by insurance policyholders can suffer huge losses if at any time the car is scratched or even disappeared
Let Me give you example :
We take the example of a Honda Jazz owner named Ms. Maya. She lives in Jakarta, which is packed with vehicles and is prone to crime and accidents, so worrying about anything happening to her new car.
Ms. Maya is calculating the cost she incurs in the event of an accident when she drives down the street. She compares the cost without insurance and with insurance.
Details of cars and events:
Honda Jazz: IDR 220 million
Damage: Front bender 50 cm bender, side body blisters
Without Insurance :
If without insurance, she must spend a total cost of about IDR 2.5 million. In addition to having to pay such a fee, she had to put her car for 3 days in the garage. As a result, she was not free to move because of having to ride public transport.
The cost of IDR 2.5 million are :
IDR 1.5 million for a dented front bumper
IDR 1 million for blister
That is the detail of the cost that must be spend for a single incident. If in a year happened for example 3 times accident with the same damage, he must spend a total of IDR 7.5 million.
With Insurance :
If Ms. Maya using car insurance, she only need to spend IDR 300 thousand for all the damage. Therefore, the damage is only counted one incident. But the insurance money is just the cost of risk.
Maya still have to pay insurance premiums for protection for a full year. According to her research on the Internet, all risk insurance premiums vary, from 2.5% to 3.5%. She made the calculation by taking the middle rate, ie 3%.
Then the details of all Maya risk car insurance premiums are as follows:
Pure Premium: 3% x IDR 220 million = IDR 6.600.000
With detail as following : The money of IDR 6,600,000 was only issued once for protection for a year. If you want to claim, he only needs to pay IDR 300 thousand per incident and get compensation if the car is lost.
Then she thought, Jakarta is prone to flooding. So she added the expansion of flood dependents at a cost of 0.35%. Actually there is another expansion, natural disasters at the same cost, but she thinks she does not need them now.
Expansion: 0.35% x IDR 220 million = IDR 770.00
With detail as following : After paying IDR 7,370,000, already. She no longer has to worry too much if her car is lost or damaged.
Then the total cost of insurance premium: IDR 6.600.000 + IDR 770.000 = IDR 7,370,000
With detail as following : When viewed at a glance, the insurance premium is indeed greater than the cost of repairs. However, in case of the same accident as the case example above.
Well, whose accident can predict? Although we have been careful, if other motorists inconsiderate, we can still get hit. And it can happen many times over the year, especially in a city where traffic is always crowded. According to a WHO survey, traffic accidents are even the third largest killer in the world.
If her car has to stay anyway she can get a replacement car for a certain period of time. Usually 3 x 24 hours after the car entered the workshop.
That's why Ms. Maya possibility finally chose all risk car insurance. Ms. Maya assessed the cost of all auto insurance premium risk is not high if you see the amount of benefits received.