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Govt prepares mandatory insurance for vehicle owners
The government is mulling over a plan to require drivers to pay for an insurance premium called third-party liability (TPL), as part of a larger effort to boost the financial sector’s growth.
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Cars pass along Jl. Gatot Subroto in Jakarta on June 19, 2024. (Antara/Muhammad Adimaja)
T
he government is preparing to require vehicle owners to participate in a mandatory insurance scheme, which many see as part of a larger effort to enlarge the country’s insurance industry.
The scheme, called third-party liability (TPL), will provide coverage of vehicle damage caused by accidents.
Vincent C. Soegianto, president director of insurance provider PT Asuransi Bina Dana Arta or Oona Insurance, estimated the mandatory insurance premium could cost Rp 250,000 (US$15.5) per year.
“The limit [for the coverage] could be around Rp 50 million. So, the premium [might be] Rp 250,000 per year,” he said on Wednesday as reported by CNBC Indonesia.
The plan was stipulated in the 2022 law on financial sector development and strengthening (PPSK). The regulation is expected to apply to both two-wheelers and four-wheelers, but there is not yet clarity on whether the former will have different premium pricing.
The law also includes other mandatory TPL insurance that could apply to home fires and natural disasters. Similar stipulation is also available for mandating that workers participate in a pension fund.
Read also: House, politicians tighten grip on financial sector in new omnibus bill
