Thursday, July 20, 2017

Type of Vehicle Insurance by Type of Protection

car Insurance
Car Insurance

Today, the development of science and knowledge along with the increasingly diverse human needs. One is the need for insurance. Many people no longer make insurance as a tertiary requirement, but make insurance a secondary and even primary requirement for people who live above average. Where they have many assets such as property or vehicles it deems necessary to obtain protection through insurance. In order for unexpected events to occur such as theft or damage, they will not suffer any significant harm.

Speaking of insurance for assets, vehicle insurance is mushrooming among the public. In addition to the increasing public welfare, also because now the vehicle becomes a necessity and even a lifestyle. So the desire to protect or provide security guarantees through insurance for the vehicle is very necessary. So this time we will discuss about the type of vehicle insurance.

Understanding Vehicle Insurance

Before entering on the type of vehicle insurance, we should first understand what is insurance and vehicle insurance.

Insurance is an agreement between two or more parties in which the insurer binds itself to the insured by accepting the insurance premium to provide reimbursement to the insured due to loss, damage or loss of expected profit or third party legal liability that may be subject to the insured arising from an event Which is uncertain. Understanding is based on the Act no. 2 of 1992 concerning Insurance Business.

More simply, insurance is a term that refers to an action, system or business or financial protection for the soul, health, property or assets, etc. of uncertain or unexpected events. Parties that provide insurance coverage or insurers are referred to as insurance companies. While the insured is the owner of the insured asset.

Then the vehicle insurance is a special type of insurance for the vehicle. Things to consider in choosing a vehicle insurance company is the financial strength of insurance companies, services provided, as well as expenses incurred to obtain protection called a premium.
Type of Vehicle Insurance

There are 2 types of insurance for vehicles seen from the type of vehicle, namely motor insurance and car insurance. And based on the type of protection, vehicle insurance is divided into 3 types, namely as follows:

1. All Risk or Comprehensive Insurance

All risk insurance is a type of vehicle insurance that provides protection and reimbursement of fees or guarantees all types of risks, both light and heavy, and the risk of loss of vehicles. So the insurance company will replace or bear all costs associated with any risks that occur in the vehicle. Even slight damage to the vehicle, the vehicle owner can file a claim and the insurance company will bear all the repair costs of the vehicle.

Because the sum insured covers all types of risks, the premium value to be paid for this type of all risk insurance is quite expensive. Insurance coverage of this type can be expanded, such as risk due to riot, or the addition of vehicle accessories. Expansion of coverage is of course through the addition of premium costs.

This type of all risk insurance is perfect and appropriate for the vehicles used everyday. Because the current traffic conditions more crowded road even not infrequently causing traffic jams in big cities. So the great potential or possibility of damage to the vehicle body such as nudged, terserempet or hit by another vehicle.
This type of insurance is widely used in the type of passenger car vehicle. In accordance with Indonesian Standard Vehicle Insurance Policy (PSAKBI), the maximum age of all risk insurance coverage is 8 years.

2. Total Loss Only Insurance (TLO)

TLO Insurance is a type of vehicle insurance that provides a guarantee or cover charge only if the vehicle is lost due to theft and damage to vehicles with the same repair value or more than 75% of the price of the vehicle at that time. If the estimated value of repairs for damage to the car is less than 75% of the price of the vehicle, then the claim filing will inevitably be rejected by the insurance company.

Because of the type of coverage that is not comprehensive, then the value of insurance premiums TLO cheaper than other types of insurance. And based on Indonesian Standard Vehicle Insurance Policy (PSAKBI), maximum age of insurance coverage of TLO is 15 years.

3. Combined Insurance

This type of insurance is a combination of all risk insurance and TLO. That is, all minor damage to severe or severe and loss of vehicles can be borne by the insurance company. Technical on this type of insurance depends on the insurance coverage provided by the insurance company such as: In the first year, the coverage is a type of all risk. Then in the second year, using TLO. Or another example of the following conditions. A vehicle is insured using this type of all risk insurance in the first 2 or 3 years when the vehicle is still in new condition. Then in the following years switch to the type of TLO considering the age of vehicles that are no longer young. So this type of insurance can adjust depending on vehicle conditions and financial condition of vehicle owners.