Insurance in Indonesia
Joint Venture Insurance Companies
There are several joint venture general insurance companies in Indonesia, in affiliation and partnership with reputable European, North American and Japanese insurance firms. When it comes to choosing an insurance company, the issue is usually trust - and who you feel comfortable dealing with. A trusted company from your home country with familiar policy structures and claims procedures may be easier to deal with. Some Joint venture general insurance companies in Indonesia also offer reliable medical insurance. All of them offer traveler's, homeowners’ and household insurance, personal liability insurance and - , car/motor vehicle (third party, own damage, personal accident driver/passenger) and life insurance - with terms you can understand (wordings of insurance policies in Bahasa Indonesia and in English).
Home Country Insurance
Ask your insurance company in your home country what coverage they offer during your stay overseas, as well as during travel to and from your new posting and on business trips. For example, you may assume that your homeowners policy will cover you no matter where you live, but in actuality, there may be many situations that are not covered by your home country insurance policy during your stay overseas. Also, there are always complications in processing claims, if overseas-based companies have no one to investigate locally.
Regardless of possible insurance coverage in your home country we advise you to locally purchase insurance protections for your property (if you own it), your household, your car(s), your personal liability and your domestic staff. Whereas for your medical insurance policy in your home country, you might already have sufficient coverage.
Insurance for your employees
If you are working for a multinational firm in Indonesia, most likely the company has insurance policies for its employees through group policies for health, life and personal accident. Often these insurance schemes are good selling points in encouraging competent Indonesian staff to join the firm. Joint venture general insurance firms can also manage an internal insurance scheme, if you'd prefer to keep it all in-house. The government accident insurance scheme, Jamsostek, covers employee accident, death, old age and health care. Portions of the premium are paid by the company and partially by the employee. This scheme is obligatory for companies with more than 10 employees and a payroll of more than Rp 10,000,000/month.
Insurance for household staff
It is customary, but not mandatory, for expats (as well as Indonesians) to cover the basic medical expenses of their household staff and drivers. Your maids, cook and driver may expect reimbursement of all medical expenses, out-patient and hospital, as well as assistance with maternity care costs. Unlike in developed countries, these medical bills are very reasonable as your servants will go to neighborhood practitioners who don't charge high rates. Because of this some expats may choose not to take insurance out for their staff but rather cap the amount of medical expense they are wiling to cover in any one year. Most commonly it is the equivalent of one month's salary. To ensure that you don't get stuck with high medical bills for a household staff member, you might want to consider a pre-condition of their employment that they pass a medical exam where they would be checked for TB and other communicable diseases. If you are requiring this examination, it will be expected that you will pay for it. If a staff member you have already hired does have a serious disease that requires long term treatment, it may be better to supply them with medicine and have them return to the village for their recovery period.
Your household staff will probably hope that your generosity will carry over to their children and spouse. While not required, it is quite common that expats assist in paying medical expenses of immediate family members of their household staff, on a case-by-case basis. Some may ask for loans for medical care for extended family members. Again, it's best to approach these requests on an individual case-by-case basis.
Employment with local firms
If you are coming to Indonesia with a local firm, don't assume they will offer the same comprehensive insurance coverage you would receive if working for a multinational company. Expats, in general, have a higher insurance awareness than most Indonesians, and this is reflected in company benefit policies. Many companies cover medical expenses under a reimbursement scheme to cover medical expenses, instead of an insurance policy. This means that all (or a percentage of) medical expenses are directly reimbursed by the company. Some companies set limits for lower-level employees, for example reimbursements up to a set amount per year or up to the equivalent of one month's gross salary. Other companies offer insurance, however the allowance that the policy covers may only be sufficient for 2nd and 3rd class in the case of hospitalization and may not be applicable for any outpatient treatment.
Things to look for in an insurance company:
- Company with a long presence in Indonesia and a profitable balance sheet.
- A name you can trust and select among the top 20 insurance companies.
- Customer service in English (or your native language) - it's your right to expect good service
- Length of time to payment of claim (local companies are very slow – mainly due to their different service mentality and their low insurance premium requests – cause them to delay claims payments allowing them to compensate their low premium income with some investment income))
- Is the insurance coverage worldwide, or only for limited countries, or local care
- Does your coverage include special riot provisions
- Does your coverage include acts of nature such as floods, volcanic eruptions, and earthquakes (very important in Indonesia)
- Be sure the agent or broker you deal with is used to dealing with the expectations of expatriates
- Check out the websites and the possibility to purchase the insurance product on line or directly from the insurance company without an intermediary.
Of particular note, be sure that your insurance has special riot provisions. Since the May 1998 riots in Jakarta, there is an increased awareness of the need for less ambiguous clauses in policies to guard against riot-related claim/payment disputes. Floods are VERY common in Jakarta and earthquakes are common throughout Indonesia, be certain that these acts of nature are adequately covered.
Insurance policies can be written in rupiah or dollar and premiums charged accordingly. If the potential expenses for your coverage are dollar-related (possible overseas medical care, replacement of imported auto parts) you may want to consider the merits of a dollar policy versus a limited policy which reimburses in rupiah.
Crimes against expatriates
Don't assume that because you are an expat you are somehow exempt from the current political turmoil and unrest in Indonesia. While expats are not targeted per se - we are, in general, conceived of as being wealthy. Most criminal elements are afraid to steal from expats (they're afraid you have some kind of special clout). Persistent rumors that the police deal very harshly with thieves who target expats also helps to deter crimes against expats. One of the most common crimes against expats is household robberies which are usually perpetrated by a seriously disgruntled ex-household staff member. Seldom are things recovered that have been stolen due to the lack of investigating capabilities of the police. So, sentimental items, ones you can't bear to lose, are best left in your home country.
Foreign installations, factories, mines and plants, are under increasing pressure due to the new regionalization of power and authority in the country. Decades of perceived injustice, where multinationals collaborated with the powers that be in Jakarta (the former president's family and his cronies) to extract the wealth from the provinces, has led in the last year to increasing cases of vandalism and destruction of foreign property. Companies should insure adequate coverage in these cases.
While car insurance is not required in Indonesia, the bank requires insurance if a car is financed. With the high prices of cars in Indonesia, this moving asset is exposed to unpredictable traffic, reckless drivers, flood, theft, and such petty theft as lifting of side mirrors and hubcaps. Indonesian drivers have also been known to duplicate car keys, which are later given to thieves to steal the car. Make sure you know exactly what your coverage would be in this instance. Stolen cars are seldom recovered; they are cut up for spare parts or the license plate is changed or they are quickly shipped to the provinces. In the few rare instances in which a stolen car is recovered, they are usually in terrible shape.
To guard against theft - it is best to hire a driver that comes highly recommended by someone who has employed him for a significant period of time.
In case of a car accident, your insurance company chooses the repair shop that you must use. It would be best to find out which repair shop they use in case of an accident, as untrained repairmen can do significant damage to your car.
If you are not fluent in Bahasa Indonesia, we suggest you use caution in making the decision to drive your own car in Indonesia. In the case of an accident, foreigners will most likely be declared as the guilty party and regardless of the facts of the accident the foreigner might be liable for the accident simply because they are presumed to be able to pay for the damages. If you have a driver, please let the driver handle the case at the scene of the accident. Also instruct him that under no circumstances should he give out personal information to the parties involved in the accident. If it looks like it's going to get hostile, consider leaving the scene and letting your driver deal with the discussion. See Security In and Around Town for more information.
Please carefully choose your insurance company for your car insurance (third party liability, own damage and personal accident of driver/passengers) and the price should not be your only priority. Many companies offer overseas insurance which you could consider. Be aware that you will find a number of low premium providers and the value of such products will only be discovered after your claim.
Be sure, before you purchase your car, that you can get auto insurance for it in Indonesia. Most insurance companies will not insure a car over 10 years old. Several, if not all, of the insurance companies operating in Indonesia will offer auto insurance, you just need to call around and check with them.
Personal liability insurance
This coverage is a must for expatriates living in Indonesia. Please check your policy in your home country, whether or not it includes worldwide coverage, which gives you some comfort in case of a legal dispute while you are traveling. Despite your worldwide coverage, we recommend you purchase a personal liability policy in Indonesia with a joint venture insurance company. Because the judicial system in Indonesia is a nightmare for foreigners, you are well advised to delegate this job to a capable insurance company, which will either compensate you for the claim or dispute it on your behalf.
The extra income you make as an expat working overseas can also be invested in an insurance scheme/product in which you can save for your kids' education or your retirement. While the changes involved in moving to Indonesia bring a lot of uncertainty to your life, it's just as important to protect your achievements and your assets in Indonesia as it is in your home country.