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Important Reasons to Have Vehicle Insurance

Important Reasons to Have Vehicle Insurance - Some people may still think not to buy vehicle insurance so that the installments become more affordable. In fact, when you decide to buy a motor vehicle, it means you are ready with all the risks that will occur. For example, collisions, scratches, slips, and losses due to theft. Therefore, do not make motor vehicle insurance a burden. It can be a help when needed. As well as car spare tires that are prepared so that at any time can be used when in an emergency though.

What is vehicle insurance?

Motor vehicle insurance is insurance that provides protection against losses and/or damages that occur in motor vehicles for various reasons mentioned in the insurance policy agreement. Generally some of the causes of events borne by insurance companies against motor vehicle objects both four-wheeled and two-wheeled, including:

● Collision

● Mired

● Evil deeds

● Theft

● Fire

As is well known, there are two types of motor vehicle insurance. First, comprehensive or popular insurance is also called all-risks even though some insurance companies no longer use this term. Second, Total Loss Only (TLO) insurance. From the meaning alone, we can actually guess the difference between the two.

TLO Insurance vs Comprehensive Insurance (all-risks)

Comprehensive insurance provides comprehensive protection which also includes protection provided by TLO insurance. In contrast, TLO insurance only provides partial protection from comprehensive insurance. This is the difference between comprehensive insurance and TLO insurance. TLO insurance only guarantees reimbursement of indemnity costs if the motor vehicle that is the object of insurance suffers damage equal to or more than 75 percent of the actual price.

The percentage size is not determined by you, but there is a separate calculation from experts. In simple terms the damage is equal to or above 75 percent if the motor vehicle can no longer be used normally. Different if the car is lost due to dispossession or theft. You have a loss above 75 percent. However, the replacement of 100 percent of TLO insurance is often misinterpreted by consumers. 100 percent reimbursement applies when making a TLO insurance claim based on the market price of the motor vehicle at the time of loss.

For example, you bought a Hyundai Grand i10 car rp145 million in 2015. Then in 2016 there was a loss. The insurance company will replace the car loss adjusted to the same type and year of production as the lost car. That is, when you make a TLO insurance claim does not mean you will get a new car from the factory. Instead, the equivalent price car, year of production, and type with a car that is lost or damaged more than 75 percent.

The protection is only 75 percent damage and loss. Meanwhile, for minor damage such as scratches or dents there will be no replacement. So, what's in it for TLO insurance? One of them is the TLO insurance premium that you have to pay much cheaper compared to comprehensive insurance.

Vehicle Insurance Policy Options

One of the insurance that can be chosen is from ABDA car insurance. This car insurance product owned by PT Asuransi Bina Dana Arta Tbk has protection benefits in motor vehicles, especially cars. ABDA offers two options for car insurance product coverage, namely comprehensive vehicle insurance (all risk) and total loss only vehicle insurance (TLO). The advantages of ABDA car insurance is the availability of 24-hour Road Side Assistance service that helps tire replacement, order between gasoline, to open the vehicle door when the key is left in the car.

Meanwhile, the expansion of the guarantee or the addition of a clause in the vehicle insurance policy can guarantee the risk of damage in certain situations. Therefore, learn well about the insurance policy, so that you get maximum benefits and protection from the vehicle insurance products that you have.

When should I have comprehensive insurance?

You should include comprehensive insurance when you just bought a new motor vehicle or brand from the factory. While TLO insurance is more suitable for used vehicles or vehicles that are under the age of 10 years. The advantages of comprehensive insurance clearly provide comprehensive protection. Starting from collisions, dents, scratches, even losses. Some motor vehicle insurance includes expansion products such as losses due to natural disasters, terrorism, to losses caused by riots.

For example, if you're caught in a sea of football fans running amok to the point of damaging your vehicle, you could file a claim for the damage caused. That way, you become calmer to have vehicle insurance whatever risks must be faced in the future.

The small number of vehicle insurance premiums is determined by the following:

According to the Financial Services Authority (OJK), there are several factors that affect the amount of premiums, including the following:

● Type of motor vehicle (which will determine the price of the motor vehicle)

● Physical condition of motor vehicle

● The age of the motor vehicle

● Location of use of motor vehicles

● Its function and use

● Type of coverage, and

● Experience of the loss event ever experienced

Well, from some of these factors provide clarity why the place of use of motor vehicles also affects the large number of insurance premiums. For example, Jakarta as the capital city, may have a greater risk compared to other regions. That's why motor vehicle insurance premiums in each region vary nominally.

Motor vehicle insurance is not only needed individually, but also needed by companies or financial institutions that provide motor vehicle ownership credit. That's why motor vehicle installments in general include the cost of insurance premiums so that the nominal becomes larger.