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All Risk Car Insurance or TLO: Choose Which One?

The awareness of the Indonesian people to the possibility of risks on the road is arguably high. This is evident from the many car insurance policies offered in Indonesia. This is natural because if you look at the risks, many accidents occur on the highway, especially in big cities such as Jakarta.

For those who want to buy an auto insurance policy, it may be confused with the choice of All Risk car insurance or Total Loss Only (TLO) car insurance. For that, car owners need to know the difference between All Risk car insurance and TLO, what is covered and how to calculate the premium. The method will be explained in detail below. 

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Why is car insurance important?

Who noted that traffic accidents became the third largest killer in Indonesia, after coronary heart and tuberculosis. According to korlantas polri data, there were 105,374 cases in 2016. Human negligence is a major factor in accidents.

It is also understandable that this factor comes not only from us, but also others. On the streets, the negligence of others can be bad for us. Even if someone has been driving in an orderly manner, he could be a victim because of careless motorists.

The risk of injury or death can be reduced by improving safety, but the risk of a damaged vehicle is often unavoidable, both lightly and severely damaged. This is what makes our vehicle, in this case the car, need to be insured. What's more, it takes a considerable cost even if the damage is only in the form of blisters in the car.

Accidents aren't the only reason. Begal and vehicle theft are increasing every day everywhere. Not only in big cities, small and quiet places are very often the target of crime. The risk of losing a vehicle continues to increase. Therefore, it is very logical if someone decides to insure their car.

What is the difference between All Risk Car Insurance and TLO?

Then, when you have decided, what type of car insurance needs to be taken? First, we need to know in advance two types of car insurance as well as its advantages and disadvantages. Car insurance is divided into two:

1. Total Loss Only Car Insurance (TLO)

Total Loss Only (TLO) literally means "only (if) total loss". This means that insurance claims can only be filed in the event of a 'total loss'. In car insurance, the total loss is damage that occurs above 75% or loss of theft or due to deprivation.

If the damage is less than that, you will not get compensation for the damage. The benchmark of 75% is taken because the car is certainly not usable anymore. The advantage, TLO insurance premiums are lower than all risk car insurance.

2. All Risk/Comprehensive Car Insurance

All risk can be defined as 'all risks'. This insurance is also called comprehensive or whole. This means the insurance will pay claims for any kind of damage, from minor damage, severe damage, to loss.

Unlike TLO, a little blister on the car, insurance will pay insurance claims. It's just that All Risk car insurance, the financing is more expensive than TLO.

In order not to choose the wrong choice, you can compare All Risk car insurance and the best TLO car insurance for your vehicle. Compare the best car insurance products from leading insurance companies across Indonesia in Cermati.com.