Jambiflash.com – Motorcycles and cars in Indonesia are set to be required to have insurance starting next year, 2025.
The Financial Services Authority (OJK) mandates that all motorcycles and cars must have third-party liability (TPL) insurance.
According to OJK’s Chief Executive Supervisor for Insurance, Guarantees, and Pension Funds, Ogi Prastomiyono, the nature of insurance is changing from being voluntary to mandatory.
He explained that TPL is an insurance product that provides compensation to third parties directly caused by the insured motor vehicle as a result of risks covered by the policy.
“The Financial Sector Development and Strengthening Law (UU P2SK) also stipulates that vehicle insurance can become mandatory for all motor vehicle owners. The government is currently preparing the implementing regulations,” said Ogi at the 2024 Insurance Forum in Jakarta on Tuesday (16/7/2024).
Ogi explained that the practice of mandatory motor vehicle insurance is already in effect in various countries, including ASEAN.
“Therefore, it is expected that the government regulation (PP) regarding mandatory insurance in accordance with the law will be issued no later than two years after P2SK, which means that by January 2025, every vehicle will have TPL insurance,” he said.
Essentially, Ogi said, this mandatory insurance is a mutual cooperation system. Thus, this program is considered capable of reducing losses in the event of traffic accidents involving multiple parties.
Furthermore, the premium costs will be cheaper compared to the current voluntary prices. The more participants there are, the cheaper the cost will be.
“The price will depend on the number of participants. The more participants who join the mandatory insurance, the cheaper the premium will be,” said Ogi. (uda)
