The insurance company will offer two types of car insurance that you can choose before you decide to buy it. Each type of insurance is called car insurance TLO and All Risk. So, before you choose which type of insurance you will use, you need to know in advance what is meant by the policy along with the coverage offered.
TLO, All Risk, and Comprehensive Insurance
TLO car insurance stands for Total Loss Only. Based on the name, at first glance, you may have guessed about how the work of this type of insurance.
This insurance has the primary objective of providing risk coverage to the “total” level or a car with a truly severely damaged condition, with an important note where the extent of the damage must exceed 75 percent if you want to get insurance coverage.
In addition to such damages, TLO can also provide coverage for car loss case. Meanwhile, All Risk car insurance can provide coverage for any type of risk that occurs in your car, although of course, this insurance has some more requirements for the car to meet the feasibility in order to get compensation.
However, there are some conditions where the risk of the car can’t be claimed to the insurance company.
- Damaged by accident for violating traffic regulations,
- Damaged by natural disasters,
- Damaged by all kinds of riots, and others.
However, you do not have to worry because those risks can still be covered by the insurer if you use extended insurance coverage.
Car insurance, in general, does not provide coverage caused by the riots, but you can get it easily by using expansion. Well, if your car is using All Risk insurance, and after that, you add it again with expanded coverage, it will become comprehensive insurance.
Well, if your car is using All Risk insurance and after that, you add it again with expanded coverage, it will become Comprehensive insurance.
In other words, comprehensive insurance is a combination of All Risk insurance coverage with one or more coverage. Because of the completeness of the protection provided, when compared to two other types (TLO and All Risk), it is not surprising that this plan has a higher premium rate than others.
The conclusion is that TLO car insurance is a type of insurance with the cheapest price, while the premium cost of All Risk is in between.
However, it does not mean that one type of car insurance is superior to other insurance because the protection of all types of car insurance has its own advantages.
Moreover, the most important thing here is that you have protection for your car. This is certainly better than when you have no insurance at all to anticipate the possible losses.
The car is one of your valuable assets and you would certainly agree with this statement. Car prices are not exactly cheap. Risks with worst-case scenarios can happen. So, undesirable events can lead to huge losses if you do not have car insurance.