Liga Asuransi – Dear readers, how are you today? May your family and business always be protected by God Almighty, amen.
Imagine a sunny morning in a city in Indonesia. A small family is on their way to their hometown full of enthusiasm. However, at a sharp bend, a truck lost control and hit their vehicle. In an instant, happiness turned into tragedy. Their car was destroyed, and lives were lost. Stories like this are not uncommon in Indonesia.
Hundreds of accidents occur every day, leaving deep sorrow for families who lose loved ones. Inadequate road conditions, low driving discipline and traffic congestion are the main causes. However, we must not give up. Awareness of the importance of driving safety and protection through vehicle insurance is the first step to preventing similar sorrows. Let’s make change happen for a safer future.
Vehicle insurance is a form of financial protection designed to protect vehicle owners from various risks, such as accidents, theft, or damage due to natural disasters. In simple terms, this insurance allows you to transfer the risk of financial loss to the insurance company by paying an agreed premium.
In Indonesia, vehicle insurance has become an important need. With the number of vehicles increasing every year, the roads are becoming increasingly congested, increasing the risk of accidents. Data shows that traffic accidents and vehicle theft cases are still at an alarming level. In this situation, vehicle insurance not only provides financial protection, but also a sense of security when driving.
Apart from that, the relevance of vehicle insurance can also be seen from the high cost of vehicle repairs, especially for new or luxury vehicles. Without insurance coverage, losses due to accidents or theft can be a significant financial burden for vehicle owners.
This article aims to provide an in-depth understanding of vehicle insurance, starting from benefits, types of protection, to sharia-based insurance options. With the right information, you can choose the best coverage to suit your needs and budget. Let’s learn more to ensure your vehicle is optimally protected.
What is Vehicle Insurance?
Vehicle insurance is a form of protection designed to reduce the financial burden due to risks such as accidents, theft or vehicle damage. In short, this insurance helps you cover the costs of repairing or losing your vehicle if undesirable things happen. By paying relatively affordable premiums, you can feel calmer when driving, because the financial risk has been transferred to the insurance company.
Important Components in Vehicle Insurance
To understand vehicle insurance, there are several terms you need to know:
- Policy:
A formal document containing the agreement between you and the insurance company. This policy includes coverage details, terms and conditions.
- Award:
The fee you pay to get protection. The premium amount usually depends on the type of vehicle, location, age of the vehicle, and the type of coverage selected.
- Claim:
The process of submitting an application to an insurance company to obtain compensation when a covered risk occurs.
- Guarantee:
The protection provided ranges from minor damage to total loss.
Legal Basis in Indonesia
In Indonesia, the existence of vehicle insurance is supported by legal regulations. For example, public transportation such as buses or taxis are required to have third party insurance to protect passengers and other parties from losses due to accidents. This shows that vehicle insurance not only protects the owner, but also plays a role in creating safety for other road users.
For Gen Z and millennials, vehicle insurance is a smart way to protect your investment. Vehicles, whether motorbikes or cars, are high-value assets. With insurance, you can drive more freely without worrying about facing unexpected risks on the road. Let’s drive smart and stay safe!
Types of Vehicle Insurance
Understand the types vehicle insurance is an important step to choosing coverage that suits your needs. Here are the five main types of vehicle insurance you need to know:
- All Risk Insurance (Comprehensive)
All Risk Insurance, or comprehensive insurance, offers comprehensive protection against various types of damage, from minor damage such as scratches to major damage due to accidents or natural disasters. In fact, vehicle theft is also included in the coverage.
Protection Coverage/Guarantee:
This insurance protects the vehicle from almost all risks, except risks excluded in the policy, such as damage due to racing or drivers without a driver’s license.
Suitable for:
New vehicles, luxury vehicles, or owners who want peace of mind with maximum protection.
Profit:
Even though the premiums are higher than other types of insurance, the protection offered is very comprehensive, making it a wise investment for a high-value vehicle.
- Total Loss Only (TLO) Insurance
In contrast to All Risk, TLO insurance only covers total loss, such as vehicle theft or damage whose repair costs exceed 75% of the vehicle value.
Protection Coverage/Guarantee:
Focus on major events, such as vehicle loss due to theft or extensive damage that is not worth repairing.
Suitable for:
Older vehicles, vehicles with a lower market value, or owners who want basic coverage at a more affordable premium.
Profit:
TLO premiums are cheaper, but still provide protection against the biggest risk scenarios that can occur.
- Additional Insurance (Rider)
Additional insurance is an option for those of you who need specific protection beyond the main coverage. Rider provides the flexibility to customize your insurance policy according to your needs.
Popular Rider Types in Indonesia:
- Natural Disaster Protection: Protects vehicles from damage from floods, earthquakes, or volcanic eruptions.
- Riots and Riots: Protects vehicles from damage due to demonstrations or riots.
- Personal Accident: Provides benefits to drivers and passengers in the event of an accident.
Profit:
You only pay for additional coverage that is relevant to the risks you face.
- Commercial Vehicle Insurance
Commercial vehicle insurance is specifically designed to protect fleets of vehicles used for business purposes, such as delivery trucks, buses or service vehicles.
Protection Coverage:
- Vehicle damage due to accidents.
- Protection of cargo.
Legal responsibility to third parties due to accidents.
Suitable for:
Logistics companies, transportation service providers, or businesses that depend on a fleet of vehicles.
Profit:
Help protect business operations from disruption due to vehicle damage or accidents.
- Sharia Vehicle Insurance
Sharia insurance is based on the principle of mutual assistance (tabarru’) and sharing risks between participants. In this system, participant contribution funds are managed transparently in accordance with Islamic law.
Sharia Principles in Vehicle Insurance:
- Participants’ contribution funds are collected in a tabarru’ fund to help each other if a participant experiences a disaster.
- There are no elements of usury, gharar (uncertainty), and maysir (gambling).
Benefits of Sharia Insurance:
- Fund Management Transparency: Participants can find out how funds are managed.
- Refund of Underwriting Surplus: If there is no claim, a portion of the tabarru’ funds is returned to the participant.
- Compliance with Sharia Values: Suitable for people who want to prioritize sharia principles in everyday life.
Suitable for:
All types of vehicle owners, especially those who want protection according to Islamic values.
Choosing the right type of vehicle insurance depends on your needs, vehicle condition and budget. If you have a new or luxury vehicle, All Risk insurance is the ideal choice. For basic protection, TLO can be an economical solution. For those with special needs, riders provide additional flexibility. Business owners with a fleet of vehicles can also take advantage of commercial vehicle insurance. Meanwhile, sharia insurance offers solutions based on Islamic values that are transparent and fair.
By understanding the various types of vehicle insurance, you can ensure that your assets are optimally protected according to your needs.
The Important Role of Insurance Brokers
Definition of Insurance Broker
An insurance broker is an independent party who acts as a liaison between customers and insurance companies. As professional consultants, insurance brokers have a duty to help customers choose insurance products that best suit their needs and budget. Not tied to one particular insurance company, brokers are able to provide a variety of options that can be tailored to each customer’s unique needs.
Benefits of Using an Insurance Broker
- Understanding Protection Needs:
Brokers help customers identify risks they may face and provide appropriate protection solutions. For example, for private vehicles, brokers can recommend All Risk or Total Loss Only (TLO) insurance based on the age and condition of the vehicle.
- Best Offers:
With access to multiple insurance companies, brokers can compare premiums, coverage, and additional services to get the best deal. This saves customers time and effort.
- Ease of Claim:
Brokers also assist customers in the claims process, ensuring claims are processed smoothly without complicated bureaucratic obstacles.
The Role of Brokers in Sharia Insurance
Insurance brokers play an important role in helping customers understand sharia insurance, which is based on the principles of mutual assistance (tabarru’) and transparency.
- Sharia Principles Education: Brokers explain the differences between conventional and sharia insurance, including how participant funds are managed transparently in accordance with Islamic law.
- Sharia Product Recommendations: Brokers help customers choose appropriate sharia insurance, both for personal and commercial vehicle protection, while explaining the benefits of returning the underwriting surplus if there are no claims.
Case Study: Optimal Protection with Broker Assistance
A transportation business owner suffered major losses due to damage to his commercial vehicle fleet. With the help of brokers, customers get commercial vehicle insurance solutions that include protection for vehicles and cargo. On the other hand, private car owners who use sharia insurance through brokers are satisfied with the fast claims process and return of underwriting surplus.
Advantages of L&G Insurance Brokers
As one of the leading brokers in Indonesia, L&G Insurance Broker has extensive experience in handling various insurance needs, both conventional and sharia. L&G collaborates with well-known companies, such as PT Asuransi Zurich Insurance Indonesia, to provide the best protection solutions to customers. L&G’s main focus is to understand customers’ specific needs, provide competitive offers, and ensure each customer gets maximum protection with the best service.
With their important role, insurance brokers become strategic partners in helping people and businesses manage risks wisely.
Process of Choosing Vehicle Insurance
Choosing the right vehicle insurance is an important step to protect your assets from various risks. Here’s a simple guide to help you make smart decisions:
- Know Your Needs
The first step is to understand protection needs based on vehicle type, age and usage patterns.
- Vehicle Type: New or luxury cars usually require All Risk coverage, while older vehicles may suffice with Total Loss Only (TLO) insurance.
- Key Risks: If you live in a flood-prone area, a natural disaster protection rider could be a relevant additional option.
- Choose the Right Type of Insurance
Determine the type of protection that suits your needs:
- All Risk Insurance: Provides comprehensive coverage for minor to major damage.
- TLO Insurance: More economical, focuses on total losses such as theft or serious damage.
- Sharia Insurance: Suitable for those of you who prioritize sharia principles with the advantages of transparency and the potential for underwriting surplus returns.
- Compare Offers
Using the help of an insurance broker is a smart way to compare premiums, coverage, and additional services from different companies. Brokers can help you find the best deals with less time and effort.
- Read the Police Carefully
Before signing, take the time to read the policy in detail. Understand the terms, conditions, coverage and exclusions in the policy. If any part is unclear, don’t hesitate to ask.
- Consultation with a Professional Broker
Insurance brokers act as advisors who understand your specific needs. They help you choose coverage that fits your budget and ensure the claims process runs smoothly in the event of a risk.
By following these steps, you can choose vehicle insurance that provides optimal protection according to your needs. Don’t hesitate to rely on the help of a professional broker to make your decisions more precise and efficient.
Common Mistakes to Avoid when Choosing Vehicle Insurance
Choosing the right vehicle insurance requires caution. Unfortunately, many people still often make mistakes that result in losses. Here are some common mistakes to avoid, along with real-life examples to better understand their impact:
- Not reading the policy in detail
When you don’t read the policy carefully, you risk missing out on important benefits.
Example: A famous artist, for example, buys insurance for his luxury car without understanding that flood protection is not included in the coverage. When floods hit Jakarta, he had to bear repair costs reaching hundreds of millions of rupiah because this protection was excluded in his policy.
- Choosing the Cheapest Premium Without Paying Attention to Coverage
Cheap premiums are tempting, but they often come with limited coverage that isn’t enough to protect your vehicle.
Example: A logistics company in Surabaya chooses insurance with low premiums for its truck fleet. When one of the trucks was involved in a serious accident, they discovered that repair costs were not fully covered due to the reduced warranty providing low coverage. As a result, the company had to bear huge losses.
- Not Considering Sharia Insurance
Many people miss the unique benefits of sharia insurance, such as the return of underwriting surpluses and the principle of transparency.
Example: A young entrepreneur who often shares his business journey on social media chooses conventional insurance without knowing that sharia insurance offers sharia value-based advantages that are in line with his vision. After being told by the broker, he regretted not considering sharia insurance from the start.
- Not Using Broker Services
Without a broker, you miss out on the opportunity to get the best deals and help with the claims process.
Example: A large transportation company in Indonesia faced a complex claims problem. After using broker services such as L&G Insurance Broker, the claims process became faster and the company managed to get full compensation.
Avoiding these mistakes can help you get optimal protection for your vehicle. Make sure you read the policy carefully, choose appropriate coverage, consider sharia insurance, and use the services of a professional broker for the best results.
Conclusion
Vehicle insurance is a smart step to protect your valuable assets from various risks such as accidents, theft, or damage due to natural disasters. In this article, we have discussed various types of protection, starting from All Risk insurance for comprehensive protection, Total Loss Only (TLO) for economic protection, to sharia insurance which is based on the principle of mutual assistance.
Apart from understanding the types of insurance, you also need to be aware of the important role of an insurance broker. Brokers help you choose the best coverage for your needs, compare offers from various providers, and provide assistance with the claims process. With the help of a professional broker, you not only get optimal protection but also efficient and transparent service.
Don’t wait until unexpected risks arise. Immediately consult your vehicle insurance needs with L&G Insurance Broker, insurance broker officially registered with the OJK. As a trusted partner, L&G Insurance Broker has extensive experience and works with leading companies such as PT Asuransi Zurich General Takaful Indonesia.
Do you need protection for your personal vehicle, commercial vehicle, or are you looking for a sharia-based solution? We are ready to help you with the best choice to suit your needs and budget.
Get in touch L&G Insurance Broker or our 24 Hour Customer Service at +62 811-8507-773 today to get maximum protection and enjoy peace of mind while driving. With L&G, you not only get the best service, but also a partner who cares about your security and protection.
Don’t hesitate, protect your vehicle now!
