TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Mandatory insurance program is urgently needed in Indonesia
Several regions in Indonesia have developed initiatives to protect the people’s loss, such as farmers from potential losses due to crop failure.
Change Size
Surveying the damage: A farmer examines tomato plants affected by volcanic ash in Tlogolele village at the foot of Mount Merapi in Boyolali, Central Java, on March 15, 2023. The farmer said she had lost Rp 2 million (US$133.61) worth of crops as a result of the Merapi eruption. (Antara/Aloysius Jarot Nugroho)
D
uring the first quarter of 2023, The Jakarta Post and other media reported on several disasters, such as the floods that inundated residential areas and agricultural land in Kudus regency, Central Java, which damaged their crops, landslides on Serasan Island, Natuna regency, and the Pertamina depot fire in Plumpang, North Jakarta, which caused many casualties and burned dozens of residents' houses.
And still vivid in our memories was the tragedy of Kanjuruhan Stadium, Malang, which occurred after the Arema FC vs Persebaya Surabaya match on Oct. 1, 2022. This tragedy caused 754 victims and 135 deaths. In addition to severe damage to the stadium’s facilities, 13 cars were also reported to have been damaged by the mass burning, the Post reported.
When viewed from the point of view of protecting the public against potential losses, the four different incidents that occurred in the different provinces actually lead to the same conclusion, namely the urgency of developing a mandatory insurance program in Indonesia.
Although Indonesia currently already has several mandatory insurance programs, their scope is still very limited. One of the mandatory insurance programs that probably almost everyone takes part in is the Road Traffic Accident Mandatory Fund Contribution (SWDKLLJ), which is a type of third-party liability (TPL) insurance or protection insurance for legal obligations to third parties that will be given to traffic accident victims. This insurance is paid for by motorized vehicle owners at the time of registration and renewal of the Vehicle Number Certificate (STNK).
In addition to the SWDKLLJ, which is regulated by the Finance Minister’s Regulation No. 36/2008, we are also familiar with airplane accident insurance, where the premium is purchased together with the purchase of a plane ticket. This insurance is regulated through Government Regulation No. 33/1964. In addition to the two examples above, there is a National Health Insurance program and Work Accident Insurance, which are also mandatory insurance programs regulated by Law No. 40 of 2004.
If we look at examples of mandatory insurance programs in several other countries, there is still room for Indonesia to develop or expand the scope of this program. South Korea, for example, has more than 40 compulsory insurance products regulated by the government, including, but not limited to motor vehicle insurance, insurance for gas accidents, natural disaster insurance, insurance due to oil pollution, compensation insurance related to environmental disasters, sports safety insurance, sports facility insurance, elevator accident insurance, fire protection insurance, and so on.
Meanwhile, in Malaysia, there are at least 10 compulsory insurance products which include motor vehicle insurance (TPL), insurance for medical malpractices, travel insurance, fire insurance for residential buildings and apartments, and so on. Other countries such as Taiwan have mandatory insurance programs such as third-party liability insurance for kindergartens and schools, third-party liability insurance for entertainment venues and malls, insurance for factories and storage of dangerous goods, and aircraft insurance including for passengers and their luggage.
