All Risk vs TLO: Which Car Insurance is Right for You?
Hello friends 👋
When owning a car, one of the crucial decisions to make is choosing the right type of insurance. The two main options usually offered by insurance companies are:
All Risk and TLO (Total Loss Only). However, in this case, many car owners are confused about making a choice, especially since both have different characteristics in terms of protection, costs, and benefits.
Choosing car insurance is not just about fulfilling an obligation, but also about protecting your investment and finances from risks. Imagine a small accident alone can cost millions of rupiah, while losing a car can lead to a huge financial loss. Therefore, understanding the differences between All Risk vs TLO is an essential step before purchasing a policy.
In this article, chikabesti will thoroughly delve into what All Risk and TLO are, what is covered, the benefits of each, real-life case examples, and a guide to choosing the type of insurance that best suits your needs.
Let's start with the first one:
1. 🧾 What is All Risk Insurance?
All Risk insurance is often referred to as comprehensive insurance. As the name suggests, this type of insurance provides very broad protection against vehicle damage, ranging from minor to severe. Even small damage such as scratches, dents, or a broken side mirror can be covered by an All Risk policy.
However, don't be mistaken; the word "All" does not mean all risks are covered. Insurance companies still have exclusions, for example, damage due to illegal racing, use of the vehicle for criminal acts, or deliberate acts. Nevertheless, the coverage is still the broadest compared to other types of car insurance.
This type of insurance is highly suitable for owners of new cars or high-value vehicles. Users who frequently drive on congested roads, park in public areas, or are new drivers also typically benefit more from an All Risk policy because the chance of minor damage is quite high.
The main drawback of All Risk is its higher premium cost, but many people consider the cost to be commensurate with the sense of security and protection obtained.
2. 🛑 What is TLO (Total Loss Only) Insurance?
TLO or Total Loss Only provides protection if the vehicle suffers total damage or is lost. Total damage is generally defined as damage whose value reaches a minimum of 75% of the vehicle's price at the time of the incident. If the damage is below this figure, a claim cannot be filed through a TLO policy.
In addition to total damage, the loss of a vehicle due to theft is also covered by TLO protection, provided it is proven through an official investigation process. Because the protection is limited, the premium cost for TLO is cheaper than an All Risk policy. This makes it an ideal choice for car owners with a limited budget or cars that are older.
Although the premium price is more affordable, TLO cannot be relied upon if the vehicle is frequently exposed to minor risks such as scratches, light bumps, or damage to specific parts.
⚖️ Comparison of All Risk vs TLO Concepts
To simplify the illustration, consider the following scenarios:
If your car is grazed by a motorbike in a parking lot and only has minor scratches, All Risk will cover the repair, while TLO cannot be used for this type of claim.
If the car is stolen or lost, both All Risk and TLO can provide protection.
If the car is involved in a severe accident such that the repair cost exceeds 75% of the car's value, both can be claimed.
If a side mirror is missing or the car body is slightly scratched, only All Risk will cover it.
In short:
All Risk = covers damage from minor to major.
TLO = only covers loss or major/total damage.
This difference gives them their respective user segments, and one cannot be said to be absolutely better than the other. The choice depends on your needs and the risks associated with your car usage.
🎯 When Should You Choose All Risk?
Choose All Risk if:
You own a new or luxury car.
The car is used daily for work or activities.
You live in a big city with heavy traffic.
You frequently park in public areas or places without full supervision.
You want even minor repairs to be covered by insurance.
You desire maximum protection and complete peace of mind.
So, All Risk is suitable for those who consider their vehicle a valuable asset and want to minimize the risk of unexpected expenses.
🎯 When is TLO Better to Choose?
TLO is more ideal if:
You have a limited premium budget.
The car is quite old, usually over 5 years.
The car is rarely used for long trips or congested areas.
You are more concerned about losing the vehicle than minor damage.
The car is used more casually, and the risk of minor collisions is low.
Here, TLO provides a core protection solution with a more affordable premium price, while still protecting against the biggest risks: car loss or severe damage.
🧠 Tips for Choosing the Right Car Insurance
To ensure your choice is correct, consider the following:
Vehicle Value – The more expensive the car, the greater the potential repair cost.
Frequency of Use – The more often the car is used, the higher the risk.
Regional Conditions – Congested, flood-prone, or theft-prone areas require maximum coverage.
Financial Capability – Choose a premium that fits your budget without sacrificing basic needs.
Vehicle Age – New cars tend to be more suitable for All Risk, while TLO is suitable for older cars.
Remember: insurance is protection, not just an expense. Don't just look at the premium; also look at the long-term benefits.
📝 Case Examples
Imagine you buy a new car and park it at the mall. When you return, you see the car door is scratched. Without insurance, you have to pay for the repair yourself. However, if you use All Risk, you can claim and only pay the own-risk fee (a small personal deductible).
On the other hand, if you have an old car that is rarely used and one day the car is lost due to theft, a TLO policy will be a financial lifesaver. Even with a low premium, the benefit is enormous in this situation.
❓ FAQ
Is all damage covered by All Risk?
No. All Risk still has exclusions according to the policy. However, the coverage is much broader than TLO.
Can an old car get All Risk?
Generally, only for cars up to a maximum age of 5 years, depending on the insurance company's policy.
Can minor damage claim TLO?
No. TLO is only for total damage \ge 75\% or loss.
Is the All Risk premium more expensive?
Yes, because the protection is broader.
Is it possible to start with All Risk and then switch to TLO?
Yes. Many car owners use All Risk when the car is new, then switch to TLO when the vehicle's age increases.
✅ Conclusion
There is no wrong choice between All Risk and TLO. What matters is choosing according to your needs.
If you want complete protection and peace of mind from minor to major damage, choose All Risk.
If you want a lighter cost but still be protected from loss and severe damage, choose TLO.
Adjust it to the vehicle's value, usage style, environment, and financial capability. Remember, insurance is not just a cost—it's an investment to protect your assets and peace of mind.
⚠️ Disclaimer
This article is for general educational purposes only. Policy terms, premium costs, and benefits may differ for each insurance company. Be sure to read the official terms and conditions and consult your needs before purchasing an insurance product.
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