Insurance is there because everyone feels the need for guarantees on what it worries. Therefore, the insurance is present to adapt to the needs, ranging from health insurance, soul, to the car. Unfortunately, there is still confusion when trying to take car insurance.
Anyone is not at all expecting bad events to befall them. However, who can guess what happens later after today? It could be good luck coming up. It can also be bad luck, but obviously unwanted. The question arises, what can be avoided, at least reduce the risk?
This is where insurance gives the answer to the question, especially for those who are in case of accidents or anything else happening while driving. Then it offers car insurance with various advantages by insurance companies.
The interest is also arguably not least. This is reflected in the positive growth of insurance every year. Unfortunately, there is still nothing to know about the things that need to be known from car insurance. To do this, this review will present things that must be understood before taking car insurance.
1. Desired protection
Car insurance is differentiated into two according to its protective scope. Both car insurance, namely comprehensive insurance and Total Loss Only (TLO). The difference is that comprehensive insurance will pay claims for all kinds of damages, ranging from minor damage, weight, to loss.
While TLO insurance will pay claims for damages of more than 75% on the car. Because of the coverage, obviously the comprehensive insurance premium is more expensive than TLO insurance.
How the insurance company determines its damage, especially those listed in TLO insurance, depends on the survey conducted. If in accordance with the terms, the claim will be accepted. Otherwise, the claim will be rejected.
2. Insured Vehicle Age
How many years the vehicle is owned must be considered. The driving age will affect the premiums paid. There is a condition if the car to be insured aged over 5 years, will be charged an additional premium fee called loading fee.
The loading fee is generally about 5% per year. So, the older the age, the greater the loading fee. However, there is a maximum age limit, such as 10-year comprehensive insurance and a minimum of 15 years of TLO.
Suppose the insured car was 7 years old when bought at RP120 million. Let’s just say that the car is B-plated and the insurance that is taken is comprehensive then the upper rate limit is about 3.59%. From that data, what is the premiums paid?
Pure Premium calculated formula with loading fee:
((Difference in vehicle year x Loading fee x Premium tariff per region) + Premium tariff per region) x car Price
Pure Premium + Loading fee: ((2 x 5% x 3.59%) + 3.59%) X Rp 120.000.000 = Rp 4.738.800
The premiums have not been added to the administration fee which is usually less than Rp 50.000.
3. The reputation of Insurance Company
There are approximately 25 insurance companies offering car insurance in Indonesia. Of the many insurance companies, there are distinguishing one company with other companies. Whether in terms of service, premiums are offered, until the reputation of the insurance company itself.
To see how far the reputation of an insurance company is, there are a number of assessments to use. For example, assessing according to Risk-Based Capital (RBC), liquidity ratios, collateral funds to protect insurance customers, investment/technical reserves plus debt claims, fixed assets, changes in gross premium, net premium income, net investment income, ratio NET claim load, up to profit ratio.
Navigate seemed complicated indeed. More easily as long as the insurance company is listed on the Indonesian General Insurance Association (AAUI) and the Financial Services Authority (OJK), this can be a sign of an insurance company that has a good reputation. Furthermore, many branches are owned. Then the number of customers and awards received.
4. Benefits are given
Usually, insurance companies offer car insurance with some advantages that customers will receive. Not the same profit is given to insurance companies that one with other insurance companies. At least all insurance companies will equally benefit without surveys to customers.
Outside of that, some insurance companies give another advantage, namely the issuance of police and work orders (SPK) 1 x 24 hours after the requirements are met, free crane facilities, free ambulance service, car replacement, and free emergency services. Choose insurance with many advantages, but still consider the reputation of the company and its premiums.
5. Workshops that become associates
For the owner of the vehicle, especially the car, maintenance (maintenance) or repair repairs carried out the workshop so the main thing. Therefore, the owner of the vehicle is very selective in choosing a workshop. Many workshops, but about performance and service have their own classes.
If you’ve got a workshop, find out if the workshop is already working with an insurance company or not. Your preferred workshop gratitude becomes the workshop of an insurance company that enters your chosen list. Otherwise, you need to consider a workshop partner working with an insurance company.
Also, consider the number of workshops that are partners of insurance companies. A large number of workshops give you a lot of options to repair your car. Choose a workshop referring to the track record of the workshop, the length of repair the workshop, the guarantee of the workshop, and spare parts that are sold guaranteed originality.
6. Additional protection offered
In automobile insurance, the term is known as additional protection from risks not included in car insurance liabilities. Including the expansion into the insurance will incur additional charges on premiums paid. Insurance customers are free to choose what expansion to put into the insurance policy.
Types of expansion of automobile insurance that can be chosen include floods (including hurricanes), earthquakes, tsunamis, riots and riots (SRCC), legal responsibility to third parties, personal accidents to passengers, legal responsibility to passengers, as well as terrorism and sabotage.
7. Risk conditions incurred
Notwithstanding the guarantee of damages for damage, whether comprehensive or damage of more than 75% (TLO), there are provisions that govern the risk of what the insurance company is covered for. You can find out easily what are the risks that are not covered by viewing the information online.
8. Know the rights and obligations
Speaking of rights and obligations, you can find out from the 6 fundamental principles of insurance. The six basic principles of insurance, including insurable interest (interest to be insured), utmost good faith, indemnity (indemnity), proximate cause (main and effective cause), and subrogation (principle of transfer of rights), and Contribution (jointly insured).
In insurance, insurable interest is understood as the right of an individual or legal entity to object to the also insured that is legal in the eyes of the law. Utmost good faith is briefly interpreted as the disclosure of the prospective insurance customers in giving the facts completely without any hidden to the insurance company.
While indemnity is a mechanism that regulates indemnification by insurance companies to insurance customers. The proximate cause is in short the main cause of the incident which then unravaged the consequences of outside influence.
Subrogation can be concluded because the insurance company has granted customer claims then the demands/lawsuit to the third party so the business insurance company. Lastly, contribution applies if the insured object is insured in two or more insurance companies, the losses are later contributed to all insurance companies compared to their respective responsibilities.
Know and understand not to be mistaken
Because it concerns the money deposited as a premium in the future, taking the insurance should be strictly based on the correct and thorough understanding. Not a little disappointed with the insurance that was taken due to other expected. For that, it is important to know and understand not to be mistaken