Understanding the Importance of Vehicle Insurance for Car Owners

KatadataOTO – Vehicle insurance is an important thing that car owners need to know about. Its function is to protect the vehicle when unwanted things happen.

For example, when the vehicle gets scratched due to an accident or a collision with another car. If the damage is covered, the owner can file an insurance claim.

So there is no need to spend extra money to repair the vehicle. 

“Imagine if we buy insurance for IDR 6 million, but can be protected from an incident (accident) where the repair costs are usually more than IDR 6 million,” said Vivi Evertina, Retail Product Management Manager of Astra Insurance on the sidelines of GIIAS 2025, in Tangerang some time ago.

Photo : Garda Oto

In more detail, Vivi revealed that the results of the 2025 National Financial Literacy and Inclusion Survey (SNLIK) show that the financial literacy rate related to insurance is 45.45 percent, while the ownership of insurance products is only 28.50 percent.

This means that insurance penetration and understanding of its benefits can still be considered quite low, although the figures are claimed to have increased from last year.

According to data collected by the insurance company Garda Oto, about 61 percent of accidents are caused by human factors. The rest are due to infrastructure or weather conditions (30 percent) and the vehicle (9 percent).

Yet, vehicle insurance is a crucial matter, helping to cover the costs of vehicle repairs and the like in accordance with the paid insurance policy.

“Instead of having to spend a larger amount of money to buy a vehicle or for repairs, it's better to set some aside. If the car is a Toyota Avanza, it's about IDR 6 million to buy insurance,” Vivi emphasized.

She then also explained that there are differences between private and commercial car insurance that vehicle owners need to know.

A private vehicle means the car is used for personal purposes, and its use does not receive compensation or money.

Meanwhile, a commercial car is rented out or receives compensation, for example, for rental or as an online taxi.

Photo : Pixabay

If a car owner buys private car insurance but the vehicle is used for commercial purposes, the insurance claim cannot be accepted.

“You must not choose the wrong one, because sometimes people buy a car for personal use and then suddenly want to use it for Gojek (online taxi). You can, but you must report it to the insurance company,” said Vivi.

So the insurance company knows the main use of the vehicle and it must match the type of car insurance chosen.