Understanding Car Insurance Premiums
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Car Insurance Premiums
The car insurance premium is a set amount of money paid monthly to guarantee against risk losses that arise in the future related to a vehicle. Driving can be risky and your car can be damaged at any time. These risks can appear in various forms of damage or life threatening injury, and sometimes involves third parties. Another form of risk involves loss or theft of the car. It’s important that your car is protected by a reputable brand such as insureka!.
What is Car Insurance Premium
Insurance premiums are a vital element in the insurance ecosystem. The premium for new and second-hand car insurance is a form of service guarantee provided to the insurance company as a guarantee for any potential risks that arise. The clause regarding the proportion of the premium is fully regulated in the insurance policy in accordance with the chosen benefits.
Policies related to premiums all refer to the regulations of the Financial Services Authority (OJK). More specifically, they are regulated under OJK Letter Number 6/SEOJK.05/2017. This rule determines the amount of the value of the vehicle insurance premium that must be paid by the customer to the insurance company. With this regulation, customers will receive a premium price that is reasonable and fair.
Types of Car Insurance Premiums
All insurance customers must pay insurance premiums.Premiums are a mandatory responsibility for every insurance customer. In general, insurance premiums are calculated based on the insurance product and/or policy chosen. That’s why the value of the premium differs per customer. insureka! offers a number of products with monthly premiums for Indonesian customers.
Comprehensive Premium.
Comprehensive Basic.
Total Loss Only (TLO).
Katastropik Polis.
Hybrid Protection.
At insureka!, Comprehensive Premium and Comprehensive Basic policies are categorized as variants of All Risk car insurance. Catastrophic Policies and Hybrid Protection, on the other hand, are expansions of the All Risk product. The product diversification is intended to serve customers’ unique needs better. For example: the Catastrophe Policy is a form of protection against the risks posed by floods, which are relatively common in Indonesia.
Car Insurance Premiums for All Risk Policies
All Risk car insurance premiums are categorized under Comprehensive Premium and Comprehensive Basic plans. In general, the premiums for All Risk policies range from 1.05% to 4.02%. The premium price for All Risk car insurance is also determined according to the area zoning of the insured car unit and the type of policy applied. Comprehensive Premium has a higher monthly premium, but more complex and stronger protection features compared to other existing policies.
Car Insurance Premiums for TLO Policies
TLO car insurance premiums provide the most inclusive protection system for used or secondhand vehicles. This is because the TLO policy can be applied to units with a maximum age of 15 years. The TLO guarantees against losses due to heavy damages over 75% of the value of the vehicle, and is more affordable than an All Risk policy. Just like All Risk, the size of the TLO premium is also determined according to regional zones. TLO Policies have premiums ranging from 0.2% to 0.69% of the value of the vehicle.
How to Calculate Car Insurance Premiums
The calculation of fixed premiums refers to OJK regulations, OJK Letter Number 6/SEOJK.05/2017. The price of car insurance premiums is further based on several aspects, such as the price of the car, which is divided according to several categories, as well as the zoning of the area.
The division of car price groups by category is as follows:
Category 1, Price < IDR 125 Million.
Category 2, Price IDR 125 Million to IDR 200 Million.
Category 3, Price IDR 200 Million to IDR 400 Million.
Category 4, Price IDR 400 million to IDR 800 million.
Category 5, Price > IDR 800 million.
The trusted brand insureka! calculates monthly insurance premiums using an automated system. If you want to manually estimate your monthly premiums, you can multiply the car price with the approximate premium percentage, which is calculated according to the type of insurance policy and the unit price of the car according to the region.
Factors Affecting Car Insurance Premiums
There are several other factors that affect the premium. In general, the price calculation for car insurance premiums is relatively the same for all types of policies, including All Risk, Total Loss Only (TLO), and product diversification. Premium figures are obtained from calculating car prices and premium percentages. The position of the premium percentage is calculated according to the type of policy and the price of the car (by category and region). For zoning the area is divided according to areas 1, 2 and 3.
Car Insurance Premium Calculator
The premium calculator can be known and calculated manually. The formula for calculating car insurance premiums can be derived as follows, namely:
Premium Figures = Car Price X Premium Percentage
As a note, the premium percentage is calculated according to the type of insurance policy chosen (Comprehensive Premium, Comprehensive Basic, TLO, Hybrid Protection, and Policy Catastrophe). The car insurance premium rate is also influenced by the price factor of the car according to the regional zone and category. The following is an overview of the percentage of premiums according to the All Risk and TLO policy types, namely:
Percentage by Region and Car Prices for P
Region 1: Price Category 1 (3.82% – 4.20%) Price Category 2 (2.67% – 2.94%) Price Category 3 (2.18% – 2.40%) Price Category 4 (1 .20% – 1.32%) Price Category 5 (1.05% – 1.16%) Region 2: Price Category 1 (3.26% – 3.59%) Price Category 2 (2.47% – 2 .72%) Price Category 3 (2.08% – 2.29%) Price Category 4 (1.20% – 1.32%) Price Category 5 (1.05% – 1.16%) Region 3: Price Category 1 (2.53% – 2.78%) Price Category 2 (2.69% – 2.96%) Price Category 3 (1.79% – 1.97%) Price Category 4 (1.14% – 1.25%) Price Category 5 (1.05% – 1.1%)
Premium Percentage by Region and Car Price u
Region 1: Price Category 1 (0.47% – 0.56%) Price Category 2 (0.63% – 0.69%) Price Category 3 (0.41% – 0.46%) Price Category 4 (0 .25% – 0.30%) Price Category 5 (0.20% – 0.24%) Region 2: Price Category 1 (0.65% – 0.78%) Price Category 2 (0.44% – 0 .53%) Price Category 3 (0.38% – 0.42%) Price Category 4 (0.25% – 0.30%) Price Category 5 (0.20% – 0.24%) Region 3: Price Category 1 (0.51% – 0.56%) Price Category 2 (0.44% – 0.48%) Price Category 3 (0.29% – 0.35%) Price Category 4 (0.23% – 0.27%) Price Category 5 (0.20% – 0.24%)
Tips for Lowering Car Insurance Premiums
You can save on car insurance premiums. To get the ideal price composition, there are several things you can do.
- Apply for a policy with the same insurance company, because there’s a chance you can receive a special promo
- Make sure your insured car has all the documents and related equipment.
- The car does not have a police record.
- Purchase one policy that is completely relevant to your car usage and needs.
- Minimize risk by reducing car usage.
- Choose a new car.
- Choose a car variant that is owned by many people.
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