How to Calculate the Cost of Car Insurance Premiums 2025
It is important to insure your vehicle because no one knows when disaster will strike. Even though we drive carefully, other drivers who are careless can also have an impact on us. Therefore, we need insurance or precautions so that in the future the problem of money for repairs can be resolved.
What is Insurance?
Many are reluctant to have motor vehicle/car insurance because they feel they have been disadvantaged. This is of course because you don’t understand what insurance is. Referring to the financial services authority website, insurance is an agreement between insurance service providers as insurers and the public as policy holders.
After you know what insurance is, then Digitalkit will discuss the types of insurance and how to calculate insurance premium costs. The goal is so that you are not deceived one day when registering with an insurance company.
Types of Car Insurance
Before taking care of vehicle insurance, you must first know that there are two types of insurance whose coverage and premium costs are different. Therefore, we will discuss it below so that your insurance needs match your level of ability.
Comprehensive Insurance
Comprehensive insurance is a type of insurance that will cover almost all damage that occurs to the customer’s vehicle. For example, because the car is scratched, damaged, dented, caught in fire, struck by lightning, or even if your vehicle is stolen. This is because the dependents are large, the premium cost that customers must pay is 1.05% – 4.2% (depending on the price of the vehicle and regional domicile).
Total Loss Only Insurance
Meanwhile, total loss only insurance is a type of insurance that provides coverage for vehicle damage of more than 75% or even if your car is stolen and not found within 2 months, then every insurance customer has the right to apply for compensation.
The premium required by insurance customers is less than 1% of the price of the car on the market at that time. Why are the payments smaller than comprehensive insurance? Because serious damage to cars rarely occurs compared to minor accidents such as abrasions and wrecks. Not only that, All Risk insurance provides coverage for almost all vehicle damage.
Car Insurance Premium Percentage Table
The following is a table of premium percentages based on 3 categories: vehicle price, area of residence and type of insurance.
As for Region 1 (Sumatra and surrounding areas), Region 2 (DKI Jakarta, West Java and Banten), and Region 3 (Regions outside Regions 1 & 2) based on a circular from the Financial Services Authority.
Annual Comprehensive Insurance Premium Table
Annual Comprehensive Insurance Premium Table
Table of Annual Total Loss Only Insurance Premiums
Table of Annual Total Loss Only Insurance Premiums
How to Calculate Car Insurance Premiums
Finally, we will learn to calculate the premium costs that customers must pay for two different types of insurance from the case examples below.
Sample case
Mr. Bima bought a new luxury car for 500 million. Mr. Bima lives in Sumatra and wants to use Comprehensive insurance to protect his new car. Approximately how much premium does Mr. Bima have to pay to the company every year?
It is known that Mr. Bima now lives in Sumatra (Region 1) with a car worth 500 million. So, the percentage charged is 1.20% – 1.32%. Taking an example of the lowest percentage:
Rp. 500,000,000 X 1.20% = Rp. 6,000,000. So, the premium charged by Mr. Bima when using comprehensive insurance is 6 million per year.
Meanwhile, if Mr. Bima uses Total Loss Only insurance, the percentage charged is 0.25% – 0.30%. Taking an example from the lowest percentage: Rp. 500,000,000 X 0.25% = Rp. 1,250,000.
That’s how vehicle insurance premiums are calculated and there are always small additional costs such as stamp duty and company administration fees. Isn’t it easy to calculate car insurance premiums?
Conclusion
That’s a practical way to calculate the cost of car insurance premiums so you don’t choose the wrong insurance you want to use. The benefit is that you can choose a company that is well-credible & trustworthy.
