how to understand the car insurance system correctly

 




The purchase value of a motor vehicle when a vehicle insurance policy is made.  This price is stated in the insurance policy and is the maximum measure for the insurance company in the event of a claim from a customer. To be clearer about the terms in car insurance, please read the article below.

Apart from preparing yourself for various possible unexpected events, you need to provide comprehensive protection for the important things in life, one of which is your vehicle. Even though it is now considered a financial necessity, there are still many people who take it without really understanding the terms used in car insurance. Before deciding to register, how to understand the car insurance system correctly

know the terms that are often found in car insurance clauses: Insurance Price The purchase value of a motor vehicle when a vehicle insurance policy is made. This price is stated in the insurance policy and is the maximum measure for the insurance company in the event of a claim from the customer. Market price The selling value of the vehicle that is the object of collateral. Premium The monetary value that a customer pays to an insurer in return for the warranty services provided. Payments can be made monthly, annually, or in cash in advance. Premium value excludes administration fees and stamp duty. Total Loss Only (TLO) 

The insurance company will cover losses if the vehicle has an accident with damage repair costs exceeding 75%, the vehicle is burned, lost due to theft or forced confiscation. However, if your vehicle only has minor damage, such as scratches on the car body, a broken mirror, or other minor damage, then the owner cannot claim insurance. All Risks This insurance is also called comprehensive or overall insurance. In contrast to TLO, insurance will pay claims for all types of damage, ranging from minor damage such as scratches, serious damage, to loss. However, All Risk insurance premiums are more expensive than TLO. Loading fees This is the cost of increasing car insurance premiums which is determined based on the age of the car. The loading fee calculation is determined based on OJK rates with the following details: For All Risk vehicle insurance, vehicles over 5 years old will be charged a minimum loading fee of 5% per year. For TLO vehicle insurance,

 the age of the vehicle that will be subject to a loading fee is usually determined according to the applicable insurance company (can be over 5, 10, or 15 years) with a minimum loading fee of 5% per year. Indemnity or amount of compensation The amount of compensation given by the insurance company to the customer for the losses they experience is based on the market prices prevailing at that time. This replacement amount can be reduced at your own risk as stated in the policy. Deductible or at your own risk The value that is the customer"s responsibility for any loss or damage is calculated from the amount of compensation.

 Endorsement An insurance agreement issued by a second party (customer) with the approval of the first party (insurer) to change the insurance policy. SPPA (Insurance Cover Request Letter) A form that prospective customers fill out for insurance to use to evaluate risk. This form contains a list of questions regarding prospective customers" data, details of the objects to be insured before being approved by the insurance company. Third Party Legal Responsibility (TJH III) This is a guarantee of reimbursement to a third party if the third party"s vehicle experiences problems with the customer"s vehicle. Clause 41B (Riot Strike Malcious Damage and Civil Commission) Providing compensation to customers when they become victims of riots, terrorism, riots, and so on. Natural disasters (Act of God) Guaranteed replacement of the customer"s vehicle if risks arise from natural disasters such as hurricanes, earthquakes, floods, and so on. Take the time to learn these terms

 before you sign a car insurance policy. Choose vehicle insurance that suits your needs. For more complete information about our products, visit the nearest Bumida branch office, nearest marketing services office or explore the Bumida website at https://bumida.co.id as well as through Bumida Information Services (LINDA) to get an interactive experience with BUMIDA Customer Service.

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