Vehicle Insurance, Is It Important ?

Vehicle Insurance, Is It Important ? – The first insurance for motorized or engined vehicles in the world was in the 1890s when the first locomotive was invented in the world precisely in London, England. Furthermore, in 1898 the Law Accident Insurance Society created the first motor vehicle insurance.

During the first world war, the large number of vehicles that suffered accidents at that time led the government at that time to enact a regulation called the Road Traffic Act in 1930 which was refined continuously until it was finally issued Road Traffic Act in 1974.

In Indonesia itself, the first insurance was brought in by the Dutch Colonial government. After the Dutch left Indonesia, the government nationalized the insurance companies that were once controlled by the Dutch and also merged several of these companies into one.

The Indonesian government established the company Perum Jasa Rahardja to provide specialist insurance for those related to passenger accidents and traffic accidents.

Nowadays, there have been very many motorized insurance emergencies in Indonesia, there are already many companies that offer this type of insurance. Currently, motorized insurance in Indonesia is divided into 2, namely those that offer total loss only (TLO) and all risk, both of which have their advantages and disadvantages.

With the emergence of many insurance companies that offer vehicle insurance, it is also comparable to the enthusiasm of the people in buying motorized vehicles which are always above 1 million sales every year, even though we can see that in 2020 there was a decline caused by the Covid-19 pandemic.

The data shows that if the number of accidents in 2018 alone reached 109,205 cases if we compare it with previous years, the number of accidents has always increased. What is even more worrying is that the ratio of insured vehicles and those that are not insured is very far away, statistics in 2010 show that only 17% of vehicles are insured, whereas with car accident cases increasingly increasing, vehicle owners should start considering using car insurance. Prospective new car buyers should provide an additional budget to buy their car insurance policy, be it when the car is new or used.

One of the reasons vehicle users haven’t bought insurance for their cars is that they feel it’s a loss to spend money every year to pay for a policy for something they don’t think happened. 

What must be understood is that the risk is always there and can never disappear. If that “bad day” happens, people who do not have vehicle insurance will certainly experience greater harm.

Take for example 2 people, Jaka and Joko. These two people are people who have different thoughts about insurance, Jaka thinks that motor vehicle insurance is very important because he feels that the risk will always be there and he has no problem paying more to get a protection net.

Meanwhile, Joko is a person who feels that vehicle insurance will only waste his money. Because he assumed that he would never have a “bad day” because he felt confident in himself. The two of them bought the same car for 400 million IDR, Jaka, who thought insurance was important, immediately looked for insurance for his vehicle. 

Jaka bought car insurance from MPM Insurance with an annual premium of 4,800,000 all risks, on the contrary, Joko did not look for insurance for his vehicle. 5 years later the two of them had an accident on the road, their car was fighting a “bull” because Joko was sleepy when he took the car. 

Both of their cars were heavily damaged, but Jaka, who has vehicle insurance, took it easy because he knew, he just claimed his insurance and would get reimbursement for the damage to his car.

On the contrary, Joko was confused to death because the damage to his car was so severe. Jaka understands that risks are always there and when that risk comes he only “loses” 24 million rupiah on the policy he pays every year, while Joko loses hundreds of millions of rupiah to repair his car

From this story, we can draw conclusions that if the risk is certain and will always exist, we cannot eliminate the risk. Buying insurance is like buying a safety net, of course, there is a price that must be paid and in this case there is a policy to be paid. 

However, this price paid will be smaller than if we didn’t pay at all. Therefore, it is appropriate if vehicle owners or prospective vehicle buyers prepare their budget to buy insurance for their vehicles. 

Many insurance programs are offered at different policy prices, everything comes back to us as policy buyers, we just need to adjust to our needs and abilities

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