Vehicle insurance. Photo: shutterstock
Jakarta -Vehicle insurance is currently not mandatory. However, in the future, vehicle insurance, especially third-party liability (TPL) insurance, will be mandatory for all vehicles, whether motorcycles or cars.
The obligation for TPL insurance for vehicles is stipulated in Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (Law PPSK). In the PPSK Law article 39A, it is stated that the Government can establish a Mandatory Insurance Program according to needs.
The Mandatory Insurance Program referred to includes third-party liability insurance related to traffic accidents, fire insurance, and home insurance against disaster risks.
Further provisions regarding the implementation of the Mandatory Insurance Program are regulated by Government Regulation (PP) after obtaining approval from the DPR. Furthermore, in Article 339 of the PPSK Law, the implementing regulations of this Law must be established no later than two years from the promulgation of this Law on January 12, 2023. This means that in 2025, the implementing regulations regarding the mandatory TPL insurance for vehicles will be issued.
Quoted from his press release in July 2024, the Executive Head of the OJK’s Insurance, Guarantee, and Pension Fund Supervisory Board, Ogi Prastomiyono, stated that the Mandatory Insurance Program, including vehicle insurance, is still awaiting the issuance of a Government Regulation (PP) as the legal umbrella for its implementation, such as the scope and effective time of the program’s implementation. After the Government Regulation (PP) is issued, the OJK will draft implementation regulations for the Mandatory Insurance Program.
“The mandatory TPL insurance program related to traffic accidents is intended to provide better financial protection to the public because it will reduce the financial burden that vehicle owners have to bear in the event of an accident, and further, it will foster better driving behavior. With increased protection against risks, the public will be more protected and feel safer, and it can also encourage overall economic growth,” as quoted from the written statement.
detikOto is trying to inquire about the certainty of the implementation of this mandatory vehicle insurance. However, as of the time this news was written, Ogi has not yet provided an answer.
What is TPL Insurance that Will Be Mandatory for Vehicles?
Quoted from the Allianz website, TPL insurance can provide benefits in the form of protection against claims for losses suffered by third parties involved in an accident. The benefit of TPL in vehicle insurance can cover losses related to two things.
First, it is the death or injury suffered by third parties involved in the accident. The third party referred to is anyone who is in the vehicle involved in the accident with our car. For example, if our car is involved in an accident with another car that has three passengers and all three are injured, the medical expenses for all three will be covered by the insurance company.
Second, it is the compensation for damage to third-party assets, beyond our assets as the insurance policyholder. The insurance company will pay the cost of damages for this loss according to the agreement written in the policy of the policyholder. So, in the event of an accident involving another vehicle, the repair costs for the third-party car will be covered by the insurance company.
