Tipswalet. Using a vehicle must always be accompanied by risks that must be borne by the driver, including the accident. Whoever imagined even expecting an accident? certainly not sure! This is the main reason for the issuance of car insurance or other vehicle insurance by insurance companies.
Car insurance is a guarantee of coverage for damage suffered by motorists due to accidents, or several other things even if only scratched. However, enthusiasts of vehicle insurance are unexpected. Many clients insure their vehicles because they never know what they will experience one day.
Why Do People Buy a Car Insurance Policy?
Having a vehicle does make you feel comfortable in carrying out your daily activities. Especially for those of you who are more often on duty outside the office using your personal vehicle. Vehicle safety and you must have taken into account. Considering yesterday there were cases of terrorists and even everything that happened due to their natural anger or with their subtle language, there were significant weather changes that could damage your vehicle and even destroy it.
For this reason, it is important for you to protect your vehicle with insurance. Ordinary insurance already exists when you take a vehicle by means of credit financing. In general, as long as you pay in installments, the insurance will protect your vehicle until the word is paid. Even so, there are also people who intentionally buy insurance policies for their cars even though their vehicle is paid off from credit installments. This is because they will benefit from insurance which will make them calm.
Types of Car Insurance in General
In the world of insurance, especially car or vehicle insurance, there may be different types of insurance coverage. At least there are two types of vehicle insurance that are currently very popular and are used by almost every person who owns a vehicle.
1. Insurance Total Lost Only (TLO)
In general, Total Lost Only (TLO) means if you lose it entirely. What is meant by vehicle insurance is Total Lost Only, insurance claims can be made if there is a ‘total loss’, such as damage that occurs above 75% and loss due to theft or even because of seizure on the highway even anywhere. If the damage is less than that, you will not get compensation for damage. The benchmark of 75% is taken because the car is certain to be unusable.
Among the points that are the advantages of this type of car insurance is the TLO insurance premium has a lower policy price compared to all risk insurance. This makes this insurance attractive insurance. This insurance is also generally the type used by leasing to insure that their new vehicle is sold to consumers on credit.
The wealth of this insurance is very difficult to claim considering the return on coverage has a very high standard of damage. The figure is 75% in vehicles, even arguably, the driver is also in danger when an accident occurs. When viewed from the aspect of security due to theft, it takes a long time for the police to prove it as a claim requirement.
2. All Risk / Comprehensive Insurance
Another type of vehicle insurance commonly used by vehicle owners is All Risk Insurance. This insurance is insurance that covers all damage to the car with the conditions agreed upon by the insurance seller and the buyer of the insurance policy.
In general, this insurance is also called comprehensive or overall. This means that insurance will pay claims for all types of damage, ranging from minor damage, severe damage, to loss. Unlike the TLO, just scuff a little on your vehicle, insurance will pay insurance claims. It’s just that all-risk insurance is more expensive than TLO.
The benefits of All Risk insurance are all damage will be borne by the insurance company. The owner of the vehicle does not need to worry about the risks that occur on the road, both light heavy accidents and loss. This is very profitable.
The disadvantage of All Risk Risk is the price of an insurance policy that is quite expensive. Of course, you will understand, this is because this type of insurance provides total protection to your account without exception.
Not All Accidents Are Covered by Insurance Including ‘All Risk’
Many insurance customers think that if you take the All Risk car insurance product, all risks will be borne by the insurance company. Even though the reality is not so. Please reopen the insurance policy and read in more detail about the insurance clause contained in it, especially in the exclusion clause. There you will get some risks that are not covered by All Risk Insurance Products. Some of them have become standard clauses in insurance agreements.
For more details, let’s look at what risks are borne and not by insurance companies. Here’s the description:
Risks borne by insurance
In All Risk Insurance, this principle of risk coverage is an accidental event and causes damage to the vehicle, even if it’s small for example:
- Your vehicle crashes into another vehicle or is hit by another vehicle or you hit dead and silent objects such as walls, poles, and trees.
- The car was hit by scratches, cracked glass, lots of accessories and others with the agreed terms of the claim.
- Vehicle loss or damage due to disasters and riots.
For insurance Total Lost Only, damage must be estimated to enter the figure of 75%. This is a mandatory rule because considering its function, TLO Insurance provides compensation for policies on vehicles that are allegedly no longer usable or even lost.
Understand the risks not covered by insurance
This type of risk is usually more directed at intentional actions or the vehicle owner consciously takes actions that he himself already understands the risks but still do. Some of the things you need to understand about this are for example:
- Car damage occurs as a result of the insured vehicle being used to push or pull objects
- Vehicles are used for training, competitions, hobbies or used by parades
- The vehicle is used for a crime both by the policyholder and by the family of the policyholder
- Loss due to embezzlement and fraud and events that are beyond reason such as hypnosis and the like
- This insured vehicle carries a load that is outside the limits specified by the manufacturer
- Vehicles carrying goods, animals that do not comply with the provisions of the use of the car
- The vehicle is exposed to chemicals, especially those originating from the car, then hit the surface and others
- Personal negligence like valet parking because this incident is considered that the vehicle owner intentionally handed over / left the car to someone who was unfamiliar with the risk of losing it.
You will be able to choose correctly after knowing in advance about the risks of what is protected and what is not protected in All Risk Insurance and TLO, When you choose the type of comprehensive car insurance or Total Lost Only, understand your needs.
Well, that was a review of the things that must be known about car insurance. Hopefully it can help you understand more about car insurance before deciding to choose the type of insurance that suits you. Good luck.
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