How to Calculate the Cost of Car Insurance per Year

The majority of motor vehicle owners still do not know how to calculate the cost of car insurance. Most of them just accept the premium rates issued by the insurance.

In fact, knowing the calculation of annual car insurance costs is very important. The goal, so that you are not deceived and pay the premium with the right amount.

The determination of the cost of insurance is not as long as it is determined by the insurance company , the rules have been issued by the Financial Services Authority (OJK).

In addition, the calculation is not the total cost to be paid, because there will be additional costs such as administrative costs, policy fees, stamp duty, car tax costs and other operational costs.

Calculating Car Insurance Costs per Year

As we know, car insurance or vehicle insurance is divided into two types, namely all risk (comprehensive) car insurance and TLO (Total Loss Only) car insurance.

All risk car insurance covers minor or major damage to the vehicle, while TLO car insurance only covers a minimum of 75% damage. Because of this, the calculation method for all risk insurance premiums and TLO is different so they cannot be equated.

The cost of all risk insurance is usually adjustable, a large fee if the damage is severe and a small fee if the damage is not too severe. Meanwhile, TLO insurance costs tend to be certain because 75% of the damage is covered.

In addition, the cost of car insurance is also influenced by several things such as the price of the vehicle and the domicile where you live and use the vehicle.

So in this article, we will discuss the calculation of annual car insurance costs, both all risk insurance and Total Loss Only insurance. Let's see the explanation of this article to the end.

All Risk Car Insurance Cost per Year

All risk insurance covers damages or losses such as abrasions, damage, or loss due to theft. The benefits obtained are more than TLO insurance so that in the calculations, the rate becomes a little more expensive.

The percentage of premium according to the rules of the Financial Services Authority is between 1.05-4.2%. Depends on the price of the car and the area of ​​domicile.

The following is a table of all risk car insurance costs per year according to official regulations from the Financial Services Authority:

Car PriceVehicle CategorySumatra and Surrounding Islands (1)DKI Jakarta, West Java, and Banten (2)Apart from areas 1 and 2
0 – IDR 125 millionCategory 13.82% – 4.20%3.26% – 3.59%2.53% – 2.78%
>Rp 125 million -Rp 200 millionCategory 22.67% – 2.94%2.47% – 2.72%2.69% – 2.96%
>Rp200 million -Rp400 millionCategory 32.18% – 2.40%2.08% – 2.29%1.79% – 1.97%
>Rp400 million -Rp800 millionCategory 41.20% – 1.32%1.20% – 1.32%1.14% – 1.25%
>Rp800 millionCategory 51.05% – 1.16%1.05% – 1.16%1.05% – 1.16%

For example, a customer who lives in Banten has a car worth Rp. 450 million, then the car is damaged, so he applies for All Risk insurance. How much premium should he pay?

First, make sure in advance if the insurance company sets a premium amount of 1.20% – 1.32% . If it is more than that, it means that the insurance company has violated the rules.

For example, the company sets an insurance premium of 1.25% , then the premium per year that must be paid is: 1.25% x IDR 450 million = IDR 56,250,000

So the customer must pay a car insurance premium per year of IDR 56,250,000

TLO Car Insurance Cost Per Year

Meanwhile, TLO insurance only covers very severe damage or when your car is lost or stolen. If your car is lost and not found within 60 days, then you are entitled to apply for Total Loss Only insurance.

The cost of TLO insurance was generally less than one percent of the price of a car on the market at that time. This is because not all risks can be borne by insurance companies, in contrast to comprehensive insurance.

The following is a table for calculating the cost of TLO insurance premiums according to regulations from the Financial Services Authority that you should know:

Car PriceVehicle CategorySumatra and Surrounding Islands (1)DKI Jakarta, West Java, and Banten (2)Apart from areas 1 and 2
0 to Rp 125 millionCategory 10.47%-0.56%0.65%-0.78%0.51%-0.56%
>Rp 125 million -Rp 200 millionCategory 20.63%-0.69%0.44%-0.53%0.44%-0.48%
>Rp200 million -Rp400 millionCategory 30.41%-0.46%0.38%-0.42%0.29%-0.35%
>Rp400 million -Rp800 millionCategory 40.25%-0.30%0.25%-0.30%0.23%-0.27%
>Rp800 millionCategory 50.20%-0.24%0.20%-0.24%0.20%-0.24%

For example, a TLO insurance customer has a car worth Rp. 250 million and is domiciled in Jakarta, so he/she falls into category 3 with an insurance rate of 0.38%-0.42% .

By taking the 0.38% rate as an example , the way to calculate the TLO type car insurance premium is: 0.38% x IDR 250,000,000 = IDR 950,000 per year.

Well, that's how to calculate the cost of car insurance per year. May be useful!

Kashem Mir (born 05 Oct. 1998) is a Bangladeshi blogger author. He is the founder of Bangla Zoom. He's official Facebook fan page name "Kashem Mir". He started his blogging career in 20…

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