What is TLO Insurance? Learn the Difference with All Risk Insurance

Car insurance has now become an essential necessity. This is because it can protect your vehicle from damage or theft, helping to minimize financial losses.

Among the types of insurance available are Total Loss Only (TLO) and All Risk insurance. But what’s the difference between the two? This article will provide a complete explanation of what TLO insurance is and how it differs from All Risk coverage. Read on for the full details.

What is TLO (Total Loss Only) Insurance?

TLO insurance provides coverage for your car against the risk of major damage or theft. This type of insurance will compensate you if your vehicle is damaged by more than 75% of its value or is stolen.

However, if the damage is less than 75%, the insurance company typically won’t offer compensation. That means if your car only suffers minor damage—such as scratches or a detached bumper—you will need to cover the repair costs yourself.

For example, if a car worth IDR 200 million sustains damage that would cost IDR 150 million to repair, the damage is considered total (over 75%). In this case, the car owner would be eligible for compensation under TLO insurance.

Difference Between TLO and All Risk Insurance

Both TLO and All Risk insurance offer protection against damage or loss. But how do they differ? Understanding the scope of each will help you choose the one that suits your needs best. Here’s a comparison:

Advantages of TLO Insurance

TLO insurance offers several benefits over other types of coverage. Here are some of the key advantages:

1. Protection Against Car Theft

Theft can happen to anyone at any time. With TLO insurance, you are eligible for financial compensation if your vehicle is stolen by an irresponsible party.

When submitting a claim, you’ll need to provide supporting evidence such as CCTV footage. Additionally, you must prove that the theft was not caused intentionally by the vehicle owner.

2. Reduces Repair Expenses

Vehicle repair costs can be quite expensive, especially for severe damage. However, with TLO insurance, repair costs will be covered by the insurance company as outlined in your policy.

Therefore, insuring your vehicle as early as possible is essential to anticipate unforeseen circumstances. It serves as a valuable financial safeguard.

3. Lower Premiums

TLO insurance premiums usually range from 0.8% to 1.02% of the vehicle’s value. This is significantly lower compared to All Risk premiums, which can reach up to 2.25%.

For example, if your car is worth IDR 150 million and the TLO premium rate is 1%, your annual premium would be only IDR 1.5 million.

This amount is considered affordable for vehicle protection. Plus, the claim amount you receive is often much higher than the premium you’ve paid.

4. Peace of Mind While Driving

With insurance coverage, you can drive with greater peace of mind. Worries about serious damage—for instance, if your car is hit by another vehicle—can be reduced since the insurer will cover the repair costs as stated in your policy.

5. Financial Stability

TLO insurance plays a crucial role in maintaining your financial stability. If your car is damaged or lost, you won’t have to dip into emergency funds or savings, since the insurer will cover the loss.

This allows you to continue meeting other financial needs without excessive stress.

How to File a TLO Insurance Claim

The process for submitting a TLO claim is generally similar across insurance providers. Here are the standard steps:

1. Report your claim via the insurance company’s call center or mobile app.
2. Complete the required documents, such as the insurance policy, claim form, and photos showing the vehicle’s condition.
3. Send the documents via email or postal service to the insurer.
4. Visit a partnered workshop or garage affiliated with the insurance company.
5. Wait for confirmation from the insurance company.

Tips for a Successful TLO Insurance Claim

TLO insurance claims are sometimes rejected due to incomplete requirements. To increase the chances of approval, follow these tips:

• Submit your claim immediately—typically within 3 x 24 hours after the incident.
• Prepare all necessary documents, including vehicle photos, a police report, copies of your driver’s license and vehicle registration, incident documentation, and a completed claim form.
• Ensure no legal violations were committed, such as driving without a license or breaking traffic laws.
• The incident location must be within the coverage area stated in the policy.
• If the car has been modified, report the modifications and their value to the insurer.
• Avoid intentional acts like damaging your vehicle, crashing it deliberately, or forcing it through floods.
• Make sure your insurance policy is still active at the time of the incident.
   

Keep in mind that each insurance provider may have different claim policies. That’s why it’s important to read and understand your insurance policy from the start to avoid missing crucial details during the claim process.

That concludes the explanation of TLO insurance, how it differs from All Risk, and tips for making a claim. With this insurance, you can file a claim if your car is heavily damaged or lost due to theft or a major accident.

As a financial solution alternative, you may consider a loan from BFI Finance. With collateral such as a Motorcycle BPKB, Car BPKB, or House/Shop Certificate, you can get additional funds with a simple process.

On the other hand, BFI Finance’s Fast Car Loan can help you get a replacement vehicle quickly and easily.

No need to worry, BFI Finance is a licensed financing institution with over 40 years of experience, fully authorized and supervised by Indonesia’s Financial Services Authority (OJK). So the process is guaranteed to be safe, legal, and transparent.

If you need additional funds, apply for a loan today because #SelaluAdaJalan with BFI Finance.