CAR INSURANCE SOLUTION

Let's compare the Calculation of Car Insurance Premium Rate from 2 Different Insurance Company: All Risk and Total Loss Only (TLO)



Premium is the amount of money that must be paid each month as a liability from the insured for his participation in insurance. The amount of premium you pay depends on several things:

  • type of car insurance (All Risk / TLO)
  • value of the car
  • year car
  • type plate number (example :  its Jakarta plate B)

Type of car insurance: All Risk / TLO

In general, each insurance company offers two types of protection that is the same Comprehensive (All Risk) and Total Lost Only (TLO).

Comprehensive (All Risk) is an indemnification by the insurance company for the loss of some or all of the car due to falling objects, fire, misconduct, theft, looting, collision, collision or other traffic accidents.

Total Lost Only (TLO) is a compensation that ONLY will be given by the company if the car is damaged in total or above 75%. In addition to the above two types, you also need to know of 'expansion'. Expansion is the addition of protection coverage. Expansions include:
  • tsunamis and earthquakes
  • flood
  • unrest
  • terrorism and sabotage
Is this protection extension necessary or not? well, It depends. For example if you live in Jakarta, you MUST take an extension of floods and riots because these two events happen quite often here. If you do not take the expansion and your car 'drops the engine' due to flooding, the insurance will NOT compensate. Now that you live!

Each car insurance company has a different rate for their car insurance product. Here are some examples:

ACA (Insurance Company)

Car Insurance Premium

Non Truck
All Risk
TLO
0 – 100 million
3,00%
0,80%
100 – 150 million
2,50%
0,80%
150 – 300 million
2,00%
0,80%
300 – 500 million
1,75%
0,80%
500 – 800 million
1,50%
0,80%
>800 million
1,50%
0,80%
Truck
2,50%
0,90%
Expansion of Warranty

Risk
Premium
All Risk
TLO
Tsunamis and earthquakes
0,15
0,05
Flood
0,35
0,13
Unrest
0,35
0,13
Terrorism and sabotage
0,15
0,05

Calculation :


For example, suppose you own a car with the Etios Valco brand with an estimated price of IDR 135,500,000.00. You will insure the car by choosing All Risk protection from the ACA and with additional extension of flood, riot, and sabotage warranties. The amount of premium you will pay is as follows:

Price of car Etios Valco IDR 135.500.000 x 2,50%      = IDR 3.387.500
Pure premium : IDR 135.500.000 x 2,50%                   = IDR 3.387.500
Expansion
Flood : IDR 135.500.000 x  0,35%                               = IDR    474.250
Unrest : IDR 135.500.000 x  0,35%                              = IDR    474.250
Terrorism and Sabotage :  IDR 135.500.000 x  0,15% = IDR    203.250
Premiums paid per year                                             = IDR 4.539.250

SINAR MAS (Insurance Company)


The amount of premium given by Sinar Mas are:

  • For Comprehensive (All Risk) protection, the premium details are if the car price> 500 million premiums are offered 2.5% and if the car price <500 million premium offered 3.25%.
  • For Total Lost Only (TLO) protection of 1.5%.
Calculation
You own a Toyota Rush car with an estimated cost of Rp 226,000,000.00. The car will be insured in Sinar Mas company by using All Risk protection. What is the premium you will pay per year? Here are the details:

Price of Toyota Rush IDR 226.000.000
Premium = IDR 226.000.000  x 3,25% = IDR 7.345.000

So the amount of premium to be paid per year is IDR 7.345.000.