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Does All Risk Insurance Replace All Vehicle Losses? Here's the Explanation

RADENPEDIA.COM -  All risk insurance replaces all vehicle loss/damage? The following is the explanation.

What all-risk car insurance covers is often a question for prospective customers or vehicle owners. The definition of all-risk car insurance is a type of car insurance policy that provides compensation if the insured customer's car experiences minor to severe damage due to an accident.

This type of car insurance is also called comprehensive because the protection provided is comprehensive or covers almost all risks that can occur in the vehicle.

Read Also: Getting to Know All Risk Car Insurance and the Difference with TLO, What is the Best Product?

This means that repair costs from minor damage such as scratches or dents to serious damage due to an accident to the point where it cannot be driven again, even loss due to theft can be covered by all risk insurance.
This is what causes the premium value of all risk car insurance to be more expensive when compared to TLO (Total Loss Only) insurance.
Understanding what all risk insurance covers before buying it is very important, so that when you submit a claim when you experience a disaster and the cause is included in the list of risks covered by insurance, your claim will not be rejected.
The following is information on the list of all risk car insurance coverage, its exceptions, and also the complete claim method, quoted from Lifepal.

What Does All Risk Car Insurance Cover?

As mentioned above, all risk car insurance provides protection from various risks that may occur. What are the risks covered by all risk car insurance? Here is the list.

  1.       Collision, impact, overturning, slipping, or falling
  2. All the evil deeds of others
  3. Theft, including those committed or accompanied by violence
  4. Fires, including those caused by lightning strikes
  5. Risks that occur during sea crossings by ferry
  6. Maintenance or transportation costs to the nearest repair shop
  7. Exceptions contained in the all risk insurance policy

Difference between TLO and All Risk Insurance

Apart from all risk insurance, there is also TLO or Total Loss Only insurance which provides different types of protection for motorized vehicles.

Before buying car insurance, it's a good idea to understand the difference between these two products so you can buy the right type according to your needs and budget. Check out the main differences between TLO and all risk insurance below.

All Risk Insurance

  1. Covers minor to severe damage (unable to be driven again) due to accidents or unintentional collisions.
  2. The maximum age of the car covered is 10 years
  3. Suitable for those who want comprehensive or more complete policy coverage, or for newly purchased cars.

TLO Insurance

  1. Covers total damage (falling into a hole, submerged in water, badly damaged and no longer drivable) or the value of car repairs reaches 75% or more of the vehicle's price at that time.
  2. The maximum age of the car covered is 15 years
  3. Suitable for those who need protection with more affordable premiums or have a used car.

All Risk Car Insurance Exclusion

The Indonesian Motor Vehicle Insurance Standard Policy (PSAKBI) has also regulated a number of exceptions in all-risk car insurance. The things excluded in this all-risk insurance policy include:

  1. Loss or damage to the car used to purchase driving lessons
  2. Used to participate in competitions, training, hobby activities, carnivals, parades, campaigns and demonstrations.
  3. Used to commit a crime
  4. Users other than those listed in the policy
  5. Used for embezzlement, fraud, hypnosis, and the like
  6. Used for theft or malicious acts, whether committed by a husband, wife, person who works for the insured, person who lives with the insured, manager, shareholder, commissioner, or employee if the insured is a legal entity, and person who is under the supervision of the insured.
  7. Excess load over the vehicle capacity specified by the manufacturer

Benefits of Having All Risk Car Insurance

The all risk car insurance type does provide maximum protection for the insured vehicle. In addition, there are several other benefits that you can feel if you have this type of car insurance, such as:

  1. Completely Protected Car

With all risk insurance, you don't need to worry about the risk of damage or loss that could happen to your car. This is because the size of the damage to the car is not the main factor in whether a claim is accepted or rejected. This is different from the TLO type of insurance which requires damage or loss above 75 percent.

  1. Wide Coverage of Benefits

All risk insurance has a wider coverage of coverage benefits when compared to TLO. Apart from that, the coverage of comprehensive insurance benefits can also be expanded further with riders (additional benefits), so that it can protect the car from special risks, such as natural disasters, riots, and third party liability.

  1. Make Mind Calm

As previously mentioned, all risk car insurance protects against various risks. This is what makes you feel calm and you don't need to worry anymore if you have this type of car insurance.

All Risk Car Insurance Costs

The Financial Services Authority (OJK) as the relevant regulator has issued Circular Letter Number.6/SEOJK.05/2017 concerning the Determination of Premium Rates or Contributions in the Property Insurance and Motor Vehicle Insurance Business Lines in 2017. In the circular letter, OJK has set a lower limit (minimum) and an upper limit (maximum) for motor vehicle insurance.

The formula that we can use to calculate the cost of all risk insurance premiums is:
All risk premium percentage x car price = all risk insurance cost or premium that must be paid
As an illustration, for example, you buy a Toyota Avanza car for Rp206 million with a B plate from Jakarta. Based on the car insurance rate above, the percentage is 2.08 percent.

So the calculation using this formula is as follows:

2.08% x 206,000,000 = 4,284,000
In conclusion, you have to pay an all risk insurance premium of IDR 4,284,000 per year.

Terms and Conditions for Claiming All Risk Car Insurance

Basically, the method for claiming all risk car insurance is not much different from TLO (Total Loss Only) insurance. The claim guidelines are as follows:

  • Document damaged vehicle parts
  • Reporting claim incidents to insurance providers
  • Preparing the necessary documents
  • Visiting an insurance company partner workshop
  • Fill out the all risk car insurance claim form
  • Waiting for news from partner workshops

Reasons Why All Risk Car Insurance Claims Are Rejected

When submitting an all risk car insurance claim, it is not certain that the insurance company will always accept it. Therefore, so that this doesn't happen to you. The following are things you should pay attention to so that your claim is not rejected.

  1. Immediately submit a claim when loss or damage occurs. Because if it is not taken care of immediately or exceeds the specified time limit, your claim will be rejected by the insurance company.
  2. Not attaching complete driver documents. That's why, make sure you attach all the necessary documents, including insurance policies, policy certificates, photocopies of driving licenses, vehicle registration certificates, and photos of evidence of the incident.
  3. The vehicle is damaged because the driver violates the law, such as violating traffic, not having a driver's license, and so on.
  4. The area where the accident occurred is not included in the clause stated in the policy.
  5. Not reporting when modifying the vehicle. Any addition of car accessories must be reported to the insurance provider and attach the insurance value of the accessory.
  6. Waiting period. The waiting period is a certain period after the policy is issued by the insurance provider.
  7. Intentional damage, such as crashing his car into another car or hitting his own car until it dents.
  8. The policy is lapse (inactive).

This is the information about all risk insurance that you should know.

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