Which Types of Vehicles Can Motor Vehicle Insurance Cover?
Find out which vehicles motor vehicle insurance can cover in Indonesia, the difference between all risk and TLO, and the claims that can be rejected.
The rise of dedicated protection for motor vehicles, known as motor vehicle insurance, has a lot to do with the growing number of traffic accidents. It is reinforced by a rise in street crime, such as the theft or seizure of motor vehicles.
So which types of vehicles can be insured against losses like these?
Based on the 3 types of vehicles most widely operated, the vehicles that can be put on an insurance list are buses and microbuses, pick-ups and trucks, and passenger vehicles (including private vehicles).
By use, two kinds of vehicles can be insured: vehicles used for personal purposes (including official vehicles) and commercial vehicles (public transport).
To explain, personal or official vehicles are not used to earn money (service fees). Commercial vehicles, by contrast, are usually used to carry passengers or goods in exchange for payment from renters or users of the service.
Even if a vehicle meets the requirements for motor vehicle insurance, there are exceptions in which an insurance claim is rejected. The company has the right to reject a claim if the vehicle is lost through embezzlement or a hypnosis scam, the driver has no driver's license, the load exceeds capacity, or the vehicle has an accident because the driver was under the influence of alcohol.
Motor vehicle insurance comes in two types. The first is all risk insurance, whose protection covers the cost of minor or major damage as well as coverage if the vehicle is lost.
The second is Total Loss Only (TLO) insurance. Besides covering a lost vehicle, it also pays for repairs if the vehicle has an accident. However, reimbursement applies only to damage that costs more than 75% of the insured value.
Because its coverage is broader, the premium for all risk insurance is naturally much higher than for Total Loss Only insurance.
Besides all risk and TLO motor vehicle insurance, there are also extension policies for additional risks covered by the insurer. The extensions include personal accident risk (driver or passengers), natural disaster risk (earthquake, flood, tsunami, volcanic eruption and so on), and the risk of being a victim of unrest, known as Strike, Riot and Civil Commotion (SRCC).
