How Much Does a Car Insurance Claim Cost? Here Are the Details and Examples
The cost of a car insurance claim is not always fully covered by the insurance company. Vehicle owners generally still need to pay a risk amount, known as ‘own risk’, in accordance with the provisions of the policy. The amount of this cost can differ between companies and policies. The Financial Services Authority (OJK) sets a minimum own risk for motor vehicle insurance at IDR 300,000 per incident.
The own risk or deductible is an amount of money that is the responsibility of the policyholder when submitting a claim. After this cost is paid, the remaining repair costs that meet the policy terms are covered by the insurance company. For example, if a car repair costs IDR 5 million and the own risk in the policy is IDR 300,000, the vehicle owner pays IDR 300,000, while the remainder is borne by the insurance company as long as the damage falls within the scope of coverage. However, the actual calculation still depends on the policy’s contents. Some products may apply an own risk per incident or other agreed-upon terms.
For vehicle damage claims, the cost the car owner needs to prepare is essentially the own risk according to the policy. The OJK regulation sets a minimum own risk limit of IDR 300,000 per incident for motor vehicle insurance. This figure does not mean all policyholders always pay exactly IDR 300,000. The deductible amount can differ based on the product and the policy terms held. For certain coverage extensions, the own risk cost may also have special provisions. For example, for flood risk, the OJK regulation stipulates an own risk of 10 percent of the approved claim value, with a minimum of IDR 500,000 per incident.
For instance, a car suffers damage with an estimated repair cost of IDR 8 million. The policy states an own risk of IDR 300,000 per incident. Thus, simply put, the vehicle owner bears IDR 300,000 and the insurance company bears IDR 7.7 million, provided all the damage is covered by the policy. This calculation is only an illustration. The final claim value may change after the insurance company conducts a survey and determines the damage covered based on the policy terms.
The type of coverage also determines whether vehicle damage can be claimed. All Risk or Comprehensive insurance provides protection against various vehicle damages according to the policy terms, including damage from insured risks. The vehicle owner still needs to pay the own risk if the claim is approved and the provision applies. Meanwhile, Total Loss Only (TLO) has a different scope. This protection is intended for total loss conditions according to the limits set in the policy, so minor damage generally cannot be submitted as a TLO claim.
Not all costs related to vehicle damage are automatically the owner’s responsibility. If the policy has an own risk provision, this cost must still be paid when the claim meets the requirements. Conversely, a claim can also be rejected if the incident or damage falls under the policy’s exclusions. Therefore, policyholders need to understand the benefits of protection, exclusions, and obligations stated in the insurance document.
To avoid inflated claim costs, car owners should understand the own risk amount from the outset when purchasing the policy. When damage occurs, document the vehicle’s condition and immediately report the incident to the insurance company according to the specified procedures. Vehicle owners also need to ensure the workshop used complies with the policy’s provisions. Some companies provide partner workshops to assist with the inspection, damage estimation, and vehicle repair process.