All Risk Car Insurance and TLO, What's the Difference?
Car insurance is a type of insurance that every motor vehicle owner must have. Car insurance itself is divided into two types, namely All Risk car insurance and Total Loss Only (TLO) car insurance. The two types of car insurance differ in the quality of protection and premium prices offered. The following is an explanation of the difference between All Risk and TLO car insurance.
- All Risk Car Insurance
All Risk car insurance is a type of car insurance that provides protection against all types of risks that may occur to a vehicle, be it damage or loss. In the All Risk insurance policy, the premium paid by the vehicle owner is more expensive than the TLO insurance premium. However, this is outweighed by the quality of more comprehensive protection.
In general, All Risk car insurance protects vehicles from damage caused by accidents, theft, fire, flood and other natural disasters. However, every insurance company has different rules and conditions in providing All Risk insurance protection for vehicles.
In addition, All Risk car insurance also provides protection for third parties such as accident victims caused by the owner of the vehicle. This is one of the advantages of All Risk insurance compared to TLO insurance.
- Total Loss Only (TLO) Car Insurance
TLO car insurance is a type of car insurance that only provides protection against loss or damage to vehicles that reach or exceed the total loss limit. The total loss limit is usually calculated based on a percentage of the market price of the vehicle, for example 75% or 80%.
In the TLO insurance policy, the premium paid by the vehicle owner is cheaper than the All Risk insurance premium. However, the protection provided is also more limited to loss or damage that reaches or exceeds the total loss limit.
So, if the vehicle only suffers minor damage such as scratches or scratches, the vehicle owner will not receive compensation from TLO insurance. In general, TLO car insurance only provides protection against the risk of accidents and does not protect vehicles from theft or natural disasters.
Conclusion:
In choosing the right type of car insurance, vehicle owners need to consider the condition of their vehicle, the risks that may occur, and the budget they have. If the vehicle is new or in good condition, then All Risk car insurance can be the right choice because it provides more comprehensive protection. However, if the vehicle is old enough and the risk of damage or loss is not too high, the vehicle owner can choose TLO car insurance which is more affordable. However, keep in mind that TLO insurance only provides protection against the risk of accidents that reach or exceed the total loss limit.
Vehicle owners also need to check and understand well the terms and conditions of the chosen insurance policy, including protection limits, premiums, claims, and other additional options such as flood insurance or non-deductible insurance.
In the event of a claim, the vehicle owner must report damage or loss of the vehicle to the insurance company as soon as possible and fulfill all the requirements requested by the insurance company. This is important so that the claim process can run smoothly and the vehicle owner can get compensation in accordance with the losses experienced.
In general, All Risk and TLO car insurance have differences in the quality of protection and premium prices offered. However, choosing the right type of car insurance will really depend on the condition of the vehicle, the risks that may occur, and the budget owned by the vehicle owner.
