All Risk vs TLO Car Insurance: Premium Price Comparison
All risk car insurance covers any damage or loss, while TLO pays only for total loss. Compare the OJK premium rates and how a car's age changes the cost.
Although they work the same way and offer the same benefits, all risk car insurance and Total Loss Only (TLO) differ in what they cover. All risk, or comprehensive, insurance protects the car as a whole (heavy damage, light damage or loss). TLO, on the other hand, pays compensation only if the car is in an accident and badly damaged (above 75%) or lost.
Because the coverage is broader, the premium for all risk car insurance is more than double the premium for TLO. With such a significant difference in premiums, you need to weigh several aspects before choosing one of the two.
Keep in mind that the premium for all risk and TLO insurance depends on several factors, such as the car's value or price and its age. The more expensive the car, the smaller the percentage of premium paid. Conversely, the older the car, the higher the premium.
The Otoritas Jasa Keuangan (OJK), Indonesia's Financial Services Authority, has set an additional premium of 5% for cars aged 5 years and above (counted from the year of manufacture).
So how are premiums calculated for all risk and TLO insurance?
Under OJK rules, the premium for Total Loss Only insurance is 0.44 to 0.53 percent (Jakarta area) for cars priced at about Rp 125 million to Rp 200 million. If the premium is set at, say, 0.49%, the calculation is: 0.49% x Rp 200,000,000 = Rp 980,000 per year.
For all risk car insurance, OJK regulations set the premium at 2.47 to 2.72 percent (Jakarta area) for cars priced at about Rp 125 million to Rp 200 million. If the premium is set at, say, 2.5%, the calculation is: 2.5% x Rp 200,000,000 = Rp 5,000,000 per year.
It is entirely possible for someone to choose all risk insurance for a few years and then switch to TLO the following year. Why? Because, as mentioned above, the older the car, the higher the premium.
Of course, this step is taken to avoid ever-higher premiums, since TLO insurance usually runs for 1 year and its premium shrinks in the following years.
For detailed information about all risk car insurance, you can visit JAGAIN.COM. Here you can also buy all kinds of insurance products at very competitive premiums.
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