There are still many people who think that vehicle insurance is not something that is important to have. Most only know health insurance that covers medical expenses when sick or life insurance that provides compensation when an accident occurs. Then, what about motor vehicle insurance? Is it important to have?
The most widely known vehicle insurance is car insurance, although in fact there is also motorcycle insurance. Vehicle insurance serves to provide motor vehicle protection benefits for comfortable driving. Especially in big cities where the number of vehicle users is booming, it is very important to have insurance to reduce the risk when driving. In this discussion, we will focus on discussing car insurance, how to choose it, how much does car insurance cost, how the coverage is, and so on.
Types of car insurance
Each country has its own regulations regarding insurance. We will discuss about All Risk car insurance and TLO (Total Loss Only) car insurance. What’s the difference?
All Risk or Comprehensive
This type of car insurance can protect you with wider and comprehensive coverage from various damages that may occur. Starting from minor damage, such as minor scratches, dents, to major damage such as a collision that causes the car body to change shape. Not only damage, this type of car insurance also protects the car from theft. Thus, all types of damage and loss can be covered by the insurance in accordance with the agreement on the policy. All Risk or Comprehensive car insurance is mostly purchased by car owners whose cars are less than 5 years old, especially new vehicles. Meanwhile, cars that are more than 5 years old are generally charged a loading rate of 5-10%.
Total Loss Only (TLO)
While TLO car insurance is an insurance service in the form of protection for cars, from the risk of damage and loss if the repair costs are estimated to be equal to, or exceed 75 percent of the vehicle price, shortly before the loss occurs. In essence, this type of insurance is more limited than the All Risk or Comprehensive type of vehicle insurance. So, if there is a risk that occurs and there is a loss whose value is below 75 percent, it will not get reimbursement from the insurance.
Can All Risk car insurance cover all risks?
When viewed from the explanation, All Risk car insurance can provide comprehensive protection from all risks of damage and loss. However, it turns out that there are some risks that cannot be guaranteed by All Risk car insurance. However, you can expand insurance coverage, the amount of which varies for each rate. Some coverages that can be added:
- Natural disasters such as floods, hurricanes, earthquakes, tsunamis, hurricanes, storms, and water damage
- Sabotage or terrorism
- Third Party Liability (TPL)
- Driver Accident
- Passenger Accident