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What are the differences between All Risk Car Insurance and Total Loss Only (TLO) Insurance?

Liga Asuransi – Dear readers, how are you? See you again in the forum for information about risk management and insurance. 

As we all know, last week, we discussed the importance of having insurance for private cars. So, this week we will continue discussing the differences between All Risk Car Insurance and Total Loss Only (TLO) Insurance.

Many people still need to become more familiar with the benefits of vehicle insurance, including car insurance. Because people still think that the costs to be incurred are too burdensome compared to the benefits to be gained.

Not surprisingly, there are still many people who have private vehicles who do not use car insurance as a guarantee for the protection of their vehicles.

Some people still think that car insurance can only benefit from damage caused by accidents. Even though this is not the case, in fact, from car insurance, there are many benefits that we can take to guarantee various risks, depending on the type of insurance you choose.

However, to get car insurance that suits your needs and abilities, you must understand the car insurance rates regulated by the OJK and insurance broker services. OJK has regulated and established guidelines for upper and lower limits for insurance premiums so you can understand insurance rates.

By understanding the insurance rate, you can consider the guaranteed costs you incur with the benefits you get.

If you are interested in this article, please share it with your colleagues. So that they can understand it just like you


Insurance Car Insurance is a protection service provided by the insurance company for the car that you guarantee. Car insurance also protects privately owned vehicles or cars for businesses from various risks such as accidents, natural disasters, fire, damage, and even riots.

Provided Protection

In general, car insurance offers two types of protection options. All-risk car insurance and total loss-only insurance (TLO) are the protection provided.

  •   All Risk: Provides guarantee for your car for all types of damage, from minor damage to heavy damage to loss of vehicle

.   TLO (Total Loss Only): Provides guarantees for your car in the event of loss or damage of more than 75% of the price of the car.

The difference between these two types of options is in the protection benefits provided and the number of premium costs. 

As explained above, car insurance only provides benefits and benefits when the damage due to an accident occurs. Especially the All Risk car insurance product which covers various car damages. 

However, people who don’t have car insurance will certainly wonder what insurance will cover.

What Damage Will Be Covered?

All Risk Car Insurance The

following is a list of what All Risk insurance will cover if there is damage to the car, according to the CEO of insurance broker PT Anugrah Atma Adiguna (DuitPintar): 

  1. Damage due to road accidents 

Vehicle damage due to accidents, whether severe or moderate, all repairs will be covered by insurance. The insurance company will cover the repair costs if the accident occurs, not because of the driver’s negligence.

Accidents can be slipping, mired, upside down, bumped, and so on. Damage caused by crime can happen to anyone and anywhere, including the crime of theft and destruction of vehicles. For example, car body damage to mirror theft. If you have insurance, the insurance will bear the risk of loss due to corruption and all repair costs.

  1.         Damage due to fire 

Car damage due to fire can also be covered if the insurance chosen is all-risk car insurance. The causes of car fires can occur due to various things, such as being struck by lightning, being exposed to other items on fire, and so on. Repairs to damage caused by the vehicle can be claimed and borne by the insurance.

  1.         Risk of loss due to theft 

Not only does it provide benefits for the risk of damage, but vehicle insurance also includes help for the risk of loss due to theft

  1.         Guarantee of legal liability 

Car accidents often involve not only one vehicle, but also a third party. Insurance can also cover the fees, such as damage costs, medical expenses, and court fees, with experts.

  1.         Maintenance and transportation costs

You don’t need to worry when your car is stuck or damaged on the road. You can immediately contact the insurance company, so they will guarantee the care and transportation of the vehicle to the workshop for repair. 

  1.         The risk of crossing the sea using ferries 

All Risk car insurance can also provide guarantees to cover damage costs on ships that are official transportation, such as ferries. If there is damage, the costs will be borne by the insurance. 

Total Loss Only (TLO) Insurance

How about the guarantee on TLO insurance? The following is the car damage covered by TLO insurance.

  1. If the car damage is above 75 percent, the TLO insurance premium is cheaper than All Risk insurance, but not all car damage can be claimed with TLO insurance. Because as the name suggests, only severe damage will be borne by the insurance if the car damage reaches 75 percent or the car is almost entirely dead. 
  2. The risk of loss TLO insurance also provides coverage when the car is lost due to theft and so on. The insurance company bears the loss if it does not occur because of the owner’s intention. View Photos Understand the difference between all risk and TLO car insurance.

Can the All Risk and TLO insurance policies be combined?

If you still need clarification about choosing all risk or TLO insurance, you can also combine the two. For example, if the car you want to insure has just left the showroom, there is nothing wrong with buying an all-risk insurance policy for the first and second years. After that, the car can be insured by purchasing a TLO insurance policy in the third year, and so on.

The financial burden compared to the risk of damage is an important consideration. A new car will require a relatively higher cost, even if the injury is only minor. As the vehicle gets older, there’s nothing wrong with switching to Total Loss Only.

How to Calculate All Risk and TLO Car Insurance Premiums?

Each car insurance may have various policies. Generally, how calculating TLO and All Risk car insurance premiums is based on the insurance rate multiplied by the price of the car.

The amount of the insurance rate that must be paid varies depending on the car’s type, year, and license plate. There is also insurance that considers the location, age of the driver, gender, and credit track record.

The average car insurance rate for TLO insurance premiums is 0.8% -1%. For example, if you have a Toyota Avanza G/T Luxury car worth IDR 193 million with an insurance rate of 0.8%, the fee to be paid is as follows:

0.8% x IDR 193,000,000 = IDR 1,544,000

Meanwhile, the all car insurance rate average risk of 2.5-3.5%. Specific insurances even provide an insurance rate of 1.5% for cars worth over IDR 500 million. To calculate the insurance premium that must be paid, suppose you choose all-risk insurance over TLO, with the price of the car Rp. 193 million. We take one of the insurance rate schemes, which is 2.5% for cars worth IDR 150-300 million. The amount to be paid is:

2.5% x IDR 193,000,000 = IDR 4,825,000

The amount of the TLO premium and all risks above will still be added to administrative costs. Usually, the administration fee is less than IDR 50,000. Based on the calculation above, the all-risk insurance premium is 312% more than the TLO. You need to spend 3 times the TLO insurance premium to get an all-risk car insurance policy.

The significant price difference will make potential insurance policy buyers need clarification. Want cheap, but who will pay in the event of minor damage? Want something expensive, but what if the insurance money is forfeited later?

Insurance premiums are only paid once, but insurance protection is only valid for one year. The high possibility of risk of damage needs to be appropriately considered. The higher the risk of severe injury, the better TLO is chosen. Meanwhile, if the price of the car is relatively high and requires a lot of money, even if it is slightly damaged, you should select an all-risk insurance scheme.

One of the best ways to get motor vehicle insurance coverage is to use the services of an experienced insurance brokerage company.

An insurance broker who will help you to collect data, process, and make analysis and statistics, so you can provide the best car insurance options that suit your needs. 

Please contact the leading insurance broker in Indonesia to get a different picture.



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