Insuring a Vehicle in Indonesia

General information on car insurance in Indonesia and how to make a claim...

In Indonesia, vehicle insurance is not mandatory except for vehicles licenced to carry public passengers, and commercial trucks. There is, however, disagreement about whether vehicle insurance is mandatory for passenger vehicles and motorbikes.

Indonesian law UU No.22 Tahun 2009 - Lalu intas dan Angkutan Jalan is the current law that pertains to driving, including vehicle insurance.

Types of Car Insurance

There are many types of vehicle insurance:

  • Third party liability
  • Collision/total loss
  • Theft - for car or motorbike theft, it is very rare that the vehicle is recovered
  • Medical expenses
  • Natural disaster (flood, wind, earthquake, tsunami, volcanic eruption)
  • Riots and general civil disturbance

Each extension has its own premium.

Choosing a car insurance company

There are many vehicle insurers in Indonesia, and many offer low premiums. Vehicle owners are advised to investigate the claim payment record of the insurance companies they are considering, and to ask for recommendations from other vehicle owners.

Joint venture insurance companies

It is possible to buy insurance in a foreigner's home country that covers a vehicle that may later be purchased in Indonesia.

Prior to arrival, foreigners planning on buying a vehicle in Indonesia should contact insurers in their home country:

  1. Find out if there are companies that may have a joint agreement with one or more Indonesian insurance companies for car insurance.
  2. Investigate services offered by world wide insurance carriers which may or not be joint venture insurers.

Joint ventures between foreign companies and those in Indonesia are well-established for life insurance, but much less so for car insurance. To date, most foreign insurance companies consider the risks too high. If there is a joint venture vehicle insurer, the premiums are likely to be expensive.

Thus, most foreigners use Indonesian-owned car insurance companies.

Third-party Insurance

Some authorities claim third-party vehicle insurance (liability) is mandatory for all vehicles and motorbikes or else the vehicle is considered illegal. However, most vehicles and certainly most motorbikes in Indonesia are not insured. In order to cover uninsured third-party drivers, the government has created a third-party vehicle insurance program that only covers bodily injuries, and is funded by a levy on vehicle registration fees. This is managed by PT Jasa Raharja (Persero).

It means that if a foreign driver driving their own vehicle is at fault in a road accident, the victim(s) are compensated for bodily injuries whether or not the foreigner has insurance.

Regardless of the confusion concerning insurance, foreigners who own a vehicle or motorbike should be insured for collision/total loss, theft and third-party (or liability) vehicle insurance.

Buying and Insuring a New Vehicle

Anyone who buys a new vehicle in Indonesia and finances it with a bank loan must be insured for collision/total loss and theft.

Most Indonesian car insurers sell insurance as long as the vehicle's ownership papers are in order.

However, only foreigners who have a valid visa (either a KITAS or KITAP) are able to purchase a vehicle in Indonesia. Foreigners who have a Sosial Budaya visa (valid for only six months) are unable to buy a new vehicle without having an Indonesian sponsor assume ownership. Many foreigners report that a passport and either a KITAS or KITAP visa are the only documents required.

Buying and Insuring a Second-hand Vehicle

A foreigner without a KITAS or KITAP visa (without residency status) can buy a second-hand vehicle and have it insured. The problem, however, is the legal title. A foreigner without residency status cannot register the vehicle in their own name. This means the title shows that the owner is an Indonesian; the foreigner cannot be credited as the owner.

Insurance Claims

The following is a typical claims procedure as required by Indonesian insurance companies:

  • Report the accident or theft to the insurance company as soon as possible, and within a maximum of 72 hours
  • Take the vehicle to a garage (or bengkel) as authorised by the insurance company for repairs. If no authorised garage exists in the area, first ask for a repair estimate from another garage and submit it to the insurance company for authorisation in advance. The insurance company also inspects the vehicle prior to repair
  • Provide the following documents:
    • Claim form
    • Photocopy of driving licence and vehicle registration
    • Police Certificate (report) of accident or theft

Third-party claims - vehicle damage only

  • The driver should not sign a Surat Pernyataan (affidavit) over to any third party in a road accident which assumes responsibility for the accident and damages to the vehicle owned by the third party
  • Third parties should fax their claims along with a written police report detailing the accident
  • If the insurance company deems the accident was the fault of the insured, then they will direct the third party to repair their vehicle at a designated garage
  • Prior to repair, the insurance company must inspect damage done to the third party's vehicle
  • The third party must provide the following documents:
    • Claim form
    • Photocopy of driving licence and vehicle registration - insured party
    • Photocopy of driving licence and vehicle registration - third party
    • Police Certificate (report)
    • Statement of the uninsured - third party
    • Garage's repair estimate

Third-party claims - bodily injuries

  • The driver should not sign a Surat Pernyataan (affidavit) to any third party in a road accident which assumes responsibility for the accident and bodily injuries suffered by third parties as a result
  • Third parties should fax their claims along with a written police report detailing the bodily injuries resulting from the accident
  • The insurance company studies the claim along with accompanying documents and decide whether the insured is legally responsible
  • The third party must submit all original receipts for medical expenses and funeral costs, or costs of repair to related property damage as a result of the accident
  • If the insurance company agrees to pay a third-party claim, a Surat Pernyataan (affidavit) must be signed by the victim (third party) stating that an agreement was reached, payment made, and that no further financial compensation demands would be forthcoming as a result of any damage caused by the accident

Collision insurance - claims for total loss or theft of motor vehicle

Provide the following documents:

  • Claim form
  • Photocopy of driving licence and vehicle registration
  • Police Certificate (report)

In the event of total loss or theft of the insured's motor vehicle, the insurance company sends an adjuster (or surveyor) to inspect the location of the loss or theft. Interviews are also conducted, and statements taken where appropriate.