Does Insurance Protect Your Car from Natural Disaster?

Posted At December 26th, 2018

Natural disaster has struck Indonesia yet again. Two big earthquakes and one tsunami occurred within a short period of time. The first earthquake hit Lombok, Bali and the surroundings. Next, an earthquake accompanied by a tsunami hit Palu, Donggala and the surroundings. Finally, the tsunami in the Sunda Strait which hit the coast west of Banten and south of Lampung.

Does the Insurance Cover?

Earthquake, tsunami and other natural disaster no doubt wreak great havoc on all kinds of properties, including cars. We can see how many cars were destroyed by natural disasters.

The question is, are those ruined cars covered by the insurance?

Unfortunately, heavily damaged cars due to natural disaster are not always covered by the insurance.

It is important that you know and understand that in a standard condition, a car insurance policy, both the comprehensive and total loss only (TLO) types, exclude damages caused by the risks of natural disasters.

The in Indonesian Motor Vehicle Insurance Standard Policy (PSAKBI), chapter 3 verse 3, it is stated that insurance coverage does not protect against losses caused by earthquake, tsunami, flood, nuclear reaction, riot, civil commotion, terrorism, etc.

Here is an excerpt from the regulations in PSAKBI.

“This insurance does not cover any loss, damage and/or expense of Motor Vehicle and/or third party legal liability, that is directly or indirectly caused by, as a result of, or incurred through:

3.1. riot, strike, locked-out workers, brawl, civil commotion, insurrection, usurped power, revolution, rebellion, military power, invasion, civil war, war and hostilities, subversive acts, terrorism, sabotage, looting;

3.2. earthquake, volcano eruption, typhoon, storm, tsunami, hail, flood, inundation, landslide, or other geological or meteorological incidents;

3.3. nuclear reactions, including but not limited to nuclear radiation, ionization, fusion, fission or radioactive contamination, regardless of whether it happens inside or outside the Motor Vehicle or the insured interest”.

Therefore, for you motor vehicle owners, it is recommended to revisit your insurance policy, or go back to your insurance company to request a clear information about the protection coverage for risks of natural disasters.

Extension of Coverage

You do not need to worry because even though natural disaster risks are excluded, this is only the case in certain conditions. You can request for those risks to be covered by the insurance company.

You can add an extension of coverage separately, or you can purchase an insurance package with more comprehensive protection coverage.

The fact is, many areas in Indonesia are prone to natural disasters. Therefore, adding protection coverage for natural disasters in your vehicle insurance policy is a wise thing to do.


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