Car insurance is very important when owning a car. It protects you against some sort of financial crisis if an accident happens or in case it gets stolen. Automobile law, in many countries, including Indonesia, it dictates that one must have car insurance. But what exactly is auto insurance, and why would you need it? Alright, let’s understand it.
You don’t pay for insurance because you expect something bad to happen. You pay for insurance so you’re protected if something bad happens.
Chris Rock (Comedian and actor)
What is Auto Insurance?
It can be termed as some kind of security to the car drivers. Drivers pay a certain amount of money monthly or yearly, known as premiums, to an insurance company. They in turn cover part of it when an accident, theft, or even a natural disaster happens to your car. This may also cover any damage you do to other people’s property or cars, depending on the policy.
The consequence of such an incident would be that you have to pay for the damages or, worse still, for the medical bills if, God forbid, there were some sort of accident. This could sum up to a cost of a very high magnitude in no time. It is here that insurance comes in handy or must be brought into effect by law in many countries, including Indonesia.
Is Car Insurance Mandatory in Indonesia?
Yes, it is compulsory in Indonesia, though the law itself does not necessarily provide all kinds of insurance. The Indonesian government demands third-party liability insurance to be possessed by all car owners. This kind of insurance does not cover damage against your car but covers any damage or injury caused to others in the case of an accident.
Therefore, if one accidentally bumps into another car or hurts somebody, the insurance of third-party liability is going to cover it. But in case one’s car gets damaged, he will have to pay for its repair himself, unless he has a more extended policy.
Full insurance, however, covers everything: your car getting damaged, being stolen, or even natural disasters-the latter of which could be a concern in Indonesia. Legally, this is not required, but many get this extra cover for more peace of mind.
Third-Party Liability Insurance: It may be the least and compulsory legally, but it covers all the damages or injury you are going to inflict upon others in case of an accident. If you accidentally hit somebody’s car or injure a person, this insurance will pay for their repair costs or the bills produced at the hospital. This would not cover, however, the cost of repairs to your car or the injuries you go through.
Comprehensive Insurance: This is the more comprehensive insurance provided. In addition to paying for damages done to other people’s cars or properties, this pays for the damages to your vehicle in case you are at fault. Theft, vandalism, and natural disasters might also be paid for under comprehensive insurance. While not necessarily required by law, comprehensive insurance does appeal to many buyers for extra protection.
In car insurance, the type of coverage refers to the needs. It’s just that third-party insurance can be so much cheaper. However, comprehensive does indeed provide just so much more protection and may save you a ton of cash over time.
Advantages of Car Insurance
Car insurance isn’t all about ticking a legal box. Here are some key benefits:
Financial Protection: Accidents can just about occur at any moment, and costs may skyrocket. For this reason, car insurance will save you from spending pocket money to cover damages, repairs, or even medical expenses that might be relieving serious mishaps.
It is compulsory to have third-party liability insurance in Indonesia. Driving without one, you will be fined or whatever the punishment, while insurance means you are legal and have no problem with police authority.
Peace of Mind: Driving is a source of stress as it is without adding to your agitation the thought of how you would pay to repair or pay medical bills in case something terrible happened. This means that you can be assured you are financially covered from whatever event might happen, whether you are at fault or not.
Accident and Injury: Car insurance pays to repair the car but also covers medical expenses if someone gets hurt. It includes not only the people traveling in your car but also others who may be part of the accident.
Protection against disaster: Indonesia lies under the zone of disasters like flood and earthquake. Full insurance would cover the costs if your car gets damaged due to those events. Thus you are added to areas with those risks.
Some well-known car insurance brands in Indonesia :
- Allianz: Allianz is a Global insurer with a strong presence in Indonesia. It offers a range of car insurance policies, from third-party liability to comprehensive insurance, reputed for its reliable coverage and fine service.
- AXA Mandiri: AXA Mandiri offers varying car insurance, each serving different needs from theft, damage, and accidents. The policies are flexible and entitle the policyholder to other privileges, including roadside assistance
- Jasindo (PT Asuransi Jasa Indonesia): Jasindo is an Indonesian state-owned insurance company. It has full car insurance and third-party car insurance, with extended protection options available, such as natural disasters
- Sinarmas: Following its commitment and vision, Sinarmas Insurance provides vehicle insurance with affordability and comprehensive policies. In addition, its vehicle insurance offers full protection against accidents, theft, natural disasters, and third-party liability
- Zurich Indonesia: The Zurich Group presents comprehensive car insurance solutions that offer ideal protection against theft, accident, and damages with added value benefits, including personal accidents and legal liability
- Adira Insurance (Autocillin): Through the product called Autocillin, Adira Insurance is one of the more recognized car insurance products in Indonesia, where full vehicle coverage is provided, including comprehensive and third-party liability
- ACA (Asuransi Central Asia): ACA sells a variety of car insurance products, including accident, theft, and third-party liability. It is also reputed for its simplicity in claims procedure and care for the customers.
These brands hold a strong position in the Indonesian car insurance industry, from simple policies to value-added services catering to the various needs of drivers.
Government Rules on Car Insurance in Indonesia
The government of Indonesia has clearly governed car insurance. The ruling required every driver to at least have third-party liability insurance; this will ensure that when one causes an accident, they would be able to pay for the damages or injuries caused to people.
All insurance companies operating in Indonesia are put under a regulatory body’s control, called Otoritas Jasa Keuangan, to ensure full compliance with set rules and adequate policy coverage for their clients. Many people who finance or lease automobiles are forced to take out comprehensive insurance on them, so as to protect the lender’s investment in those vehicles.
You would also be liable to pay for fines and their legal consequences in case you were to drive without sufficient insurance coverage. Worst case scenario, in the event of an accident, you would be bound to pay for all of those expenses, which again would be utterly hellish to deal with .
Conclusion
Car insurance might sound like just another expenditure, but it is very important in terms of protection against financial losses and also for legal purposes. Third-party liability insurance in Indonesia is just but the minimum one legally needs to hit the road. It is a policy that pays for damages or injury one causes to others in an accident. Most of the people want protection from damage, theft, or natural calamities to their cars apart from minimum protection.
Be it that you just passed your driving test or have been driving for several years, proper insurance coverage will mean hitting the road with confidence, knowing you are well covered should things go wrong. After all, car insurance gives a person peace of mind and financial security while keeping them in the good books of the law.