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Four Considerations Before Buying Comprehensive Car Insurance

In House Magazine
30 Aug 2019
Four Considerations Before Buying Comprehensive Car Insurance

Purchasing car insurance requires careful consideration. Should you choose Total Loss Only (TLO) insurance or comprehensive car insurance? Unlike TLO insurance, which only covers severe damage or loss of the vehicle, comprehensive car insurance covers almost any kind of damage, including minor ones.

Although comprehensive car insurance may seem more advantageous, customers still need to consider a few factors before buying it. Why? With its extensive coverage, the premium cost for comprehensive car insurance is usually not cheap.

To help you make an informed decision, here are four factors to consider before choosing comprehensive car insurance:

  1. Cost The premium for comprehensive car insurance can range from 2.5% to 3.5% of the vehicle's value per year. This amount can be twice as much as the premium cost for TLO insurance. Therefore, prepare a budget in advance before deciding to purchase comprehensive car insurance.

  2. Coverage Many people believe that comprehensive insurance covers any risk that occurs to the vehicle. However, there are certain risks that are typically not covered by comprehensive car insurance, such as protection for vehicle accessories. However, some insurance companies do offer coverage for accessories.

  3. Understand the Own Risk (OR) cost If the damage to the vehicle is caused by personal negligence, the insurance company usually requires you to pay an own risk cost, which is a predetermined amount. This cost also applies to TLO insurance. For example, if the own risk cost is set at IDR 300,000, then the policyholder must pay IDR 300,000, and the insurance company will cover the remaining cost required for repairs.

  4. Pay attention to exclusions Every insurance policy has certain risks that are not covered. For example, loss or damage to vehicle parts caused by wear and tear, intentionally caused damage, and others may not be covered. Therefore, it is essential to be well aware of the risks that the insurance company does not cover.

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