Why Are So Many Insurance Claims in Banten Rejected? Here’s the Reason and the Solution

Wave of Disappointment from Banten

Banten is now rapidly growing as one of Indonesia’s largest industrial centers. From the Cikande and Krakatau Steel industrial zones in Cilegon, to the warehouse complexes in Tangerang and Serang, thousands of businesses rely on insurance policies for their protection.

However, behind the economic upsurge, there is a phenomenon that many are unaware of: a wave of disappointment and frustration among entrepreneurs due to insurance claims being rejected, complicated, or partially paid.

Some entrepreneurs admit they have paid premiums for years, but when disaster strikes, their policies seem useless.

Why does this happen so often in Banten? Does the fault lie with the insurance companies, or with the policyholders themselves?

This article will examine the main causes of claim rejections, present real-life case examples from various sectors in Banten, and demonstrate how PT. Liberty and General Insurance Broker (L&G Insurance Broker), an OJK-licensed insurance broker based in Bintaro, South Tangerang, provides real solutions and the right protection for entrepreneurs.

Contact L&G Insurance Broker now at Phone number 08118507773 for a free consultation before the risks haunt your business.

1. Root of the Problem: Why Insurance Claims Often Fail in Banten

Based on field experience and customer complaint data, there are five main reasons why insurance claims in Banten are often rejected:

1. The Police Are Not Appropriate to the Actual Risk

Many policyholders purchase insurance through agents who focus on sales, not risk analysis. As a result, the risk descriptions in the policy differ from actual conditions on the ground.

For example, a plastics factory in Cikande was listed on the policy as a storage facility, not a production facility. When a fire broke out, the claim was denied because the risk type was not appropriate.

1. Incomplete Data and Weak Evidence

Some entrepreneurs do not prepare supporting documents such as loss reports, minutes, or chronology of events.

Insurance companies certainly require objective evidence to assess the validity of claims. Lack of documentation can delay or even cancel claims.

1. Unaware of Policy Exclusions

Many customers do not read the “fine print” or exclusion clauses in the policy.

For example, a standard fire policy does not automatically cover damage from floods or earthquakes, unless purchased separately.

1. Lack of Assistance During the Claims Process

When a loss occurs, customers often deal directly with adjusters and insurance companies without expert support.

This is where insurance brokers should play a role in defending and assisting customers so that claims are processed according to the contract.

1. Underinsurance (Insurance Value Too Low)

A classic problem in Banten: many factory and warehouse owners insure assets far below their actual value to keep premiums down.

As a result, when a large loss occurs, claim payments are cut proportionally (average clause).

2. Real Case Studies: Learning from Field Experience

🔹Case 1: Plastic Factory Fire in Cikande

A small factory experienced a major fire due to a short circuit in the machine.
Losses reached Rp. 12 billion, but only Rp. 4 billion approved by insurance. After investigation, the cause was determined to be: the insured value of the assets was only Rp6 billion.

👉 Error: underinsurance and policy not renewed for 3 years.

🔹Case 2: Logistics Warehouse in Tangerang Flooded

A major flood in early 2024 submerged a logistics warehouse storing electronic goods.
The customer assumed that fire insurance covered floods. It turned out not to. The claim was rejected because it lacked flood coverage.

👉 Error: ignorance of the exception clause.

🔹Case 3: Hotel in Anyer Fails to Claim Tornado Damage

Damage to roofs and outdoor facilities is not recognized in the policy because it is considered an “act of nature” which is not included in standard risks.
Brokers should be able to help add a “storm & tempest” clause to prevent rejection.

👉 Mistake: direct purchase of police through agents without risk analysis.

3. Identifying Key Business Risks in Banten

Banten has unique geographical and economic characteristics, so the risks are diverse:

Without proper risk management and insurance protection, the above losses could destroy business cash flow in just a matter of days.

4. Insurance Guarantees Required by Banten Entrepreneurs

Each type of risk above requires a different type of protection. Here are some important policies recommended by L&G Insurance Broker:

1. Property All Risks (PAR)– protect business assets from fire, flood, storms and other physical risks.
2. Business Interruption Insurance (BI)– bear the loss of income due to operational disruptions.
3. Public Liability Insurance– protects against third party claims.
4. Contractor’s All Risk (CAR) And Erection All Risk (EAR)– for construction projects and machine installations.
5. Marine Cargo Insurance– for shipping industrial goods from and to the ports of Merak or Tanjung Priok.
6. Machinery Breakdown Insurance– for industrial production machines.
7. Workers’ Compensation (JKK & JKM)– protect workers from work accidents.

All these guarantees can be combined in one comprehensive program through experienced insurance brokers such as L&G.

5. How L&G Insurance Brokers Help Avoid Claim Rejections

As OJK-licensed independent insurance broker, L&G Insurance Broker have professional responsibility to act in the interests of the customer, not the insurance company.
The following are the service stages carried out by L&G to prevent claim rejection:

1. Risk Assessment
   L&G conducts site visits to identify all potential hazards and weaknesses in security systems.
2. Policy Design & Negotiation
   The policy is written in clear language, covers all actual risks, and is negotiated with the best insurance companies with good claims reputations.
3. Policy Audit & Review
   Each year the policy is evaluated to remain relevant to the latest asset values ​​and business conditions.
4. Claim Assistance
   In the event of a loss, the L&G team assists customers from the initial report to claim payment.
5. Client Advocacy
   If the claim is rejected or delayed, the broker will submit arguments and technical evidence to defend the client’s rights.

6. Insurance Premium Estimates for Businesses in Banten

Premiums vary greatly depending on the type of business, location, and asset value.
As a general overview:

Brokers like L&G can negotiate premiums more efficiently due to large business volume and strong relationships with many insurance companies.

7. Ideal Insurance Claim Procedure (With Broker Assistance)

When a disaster occurs, quick and appropriate steps are crucial to the outcome of the claim.
Here’s a guide from L&G Insurance Broker:

1. Immediately report the incident within 3×24 hours.
2. Include photos, videos, and a chronology of events.
3. Collect supporting documents:police reports, damage certificates, purchase invoices, and financial statements.
4. L&G will appoint an independent loss adjuster to calculate objective losses.
5. The negotiation process with insurance companies is carried out by brokers.
6. Claim payments are distributed directly to the insured.

With this system, customers do not need to be confused by facing long bureaucracy or differences in interpretation in the policy.

8. True Story: A Rp17 Billion Claim Successfully Settled by L&G Insurance Broker

In 2024, L&G Insurance Broker successfully settled a major claim worth Rp17 billion for heavy equipment damage which fell into the sea during shipping from Surabaya to East Kalimantan.
This claim was initially rejected because the insurance company considered the accident to be due to operator error.

However, the L&G team proved that the primary cause was strap failure due to a material defect — a risk that was explicitly guaranteed in police.
Thanks to technical assistance and argumentation, the claim was finally accepted.paid in full.

9 Real Steps Before Purchasing an Insurance Policy in Banten

Before you sign any policy, ensure these steps:

• Conduct a risk audit first with a professional broker.
• Make sure the insured value matches the actual value of the asset.
• Understand the exceptions and extensions required.
• Choose an insurance company with a good claims reputation.
• Use the services of an OJK-registered insurance broker such as L&G Insurance Broker.

10. Closing: Don’t Let Disappointment Stop You

The disappointment of many Banten entrepreneurs with insurance services could actually be avoided.

It’s not the insurance system that’s wrong, but lack of professional guidance from the start.

By using independent insurance brokers such as PT. Liberty and General Insurance Broker (L&G Insurance Broker), you will have an advisor, negotiator, and advocate for your own interests at every stage — from policy design to claim payment.

Don’t let disappointment with insurance make you give up.

Protect your business with risk management and insurance consultation with L&G Insurance Broker,

OJK-licensed professional insurance broker with an office in Bintaro, South Tangerang — part of Banten Province.

💼 Contact L&G Insurance Broker today and find the protection that really works for you.

HOTLINE L&G 24 JAM: 0811-8507-773 (PHONE – WHATSAPP – SMS)

Website: lngrisk.co.id

Email: halo@lngrisk.co.id