5 Key Differences Between TLO and All Risk Insurance, Find Out Which One Fits You Best!

When choosing a car insurance product, one common question often arises: Is it better to choose TLO or All Risk insurance? Both types of insurance serve the same main purpose, to provide financial protection against loss or damage to your vehicle. However, the difference between TLO and All Risk insurance is quite significant.

To help you make the right choice, TAF will share a complete explanation of their differences and a guide to help you choose the most suitable coverage for your needs. Let’s explore it in detail below.

Read also: 11 Tips for Beginner Car Maintenance to Keep Your Car in Top Shape

The Difference Between TLO and All Risk Insurance

The right form of protection for your car is through insurance. To understand the difference between TLO and All Risk insurance, let’s discuss each main distinguishing aspect below:

1. Coverage Scope

TLO (Total Loss Only) insurance provides protection only if the car experiences total damage or loss. In this context, “total damage” means when the repair cost reaches more than 75% of the car’s value at that time, or the vehicle is completely lost due to theft.

On the other hand, All Risk insurance covers all types of damage — minor, moderate, or severe. This means that if your car gets scratched, dented, or even loses some parts, you can still file a claim.

2. Insurance Premium Amount

One of the most visible differences between the two lies in their premium rates.

• TLO Car Insurance Premium:

The premium for TLO car insurance is generally more affordable, ranging from 0.2% to 0.5% of the car’s value per year. This is because the risks covered are limited to total loss or severe damage.

• All Risk Car Insurance Premium:

The All Risk car insurance premium is higher, around 1% to 3% of the car’s value per year. The higher cost corresponds to the broader protection, including minor damages.

3. Car Age and Condition

The car’s age also becomes an important distinguishing factor between these two types of insurance. Usually, All Risk car insurance is only available for cars up to 5 years old. This is because the older the car, the higher the risk of damage and the greater the claim costs that the insurance company must bear.

Meanwhile, TLO car insurance can cover vehicles up to 10 years or more, depending on the company’s policy. That’s why owners of older cars often choose TLO as a more realistic and cost-efficient protection option.

4. Types of Risks Covered

TLO insurance covers risks such as:

• Loss due to theft or robbery,

• Severe damage due to a major accident,

• The car being completely burned due to a disaster or accident.

Meanwhile, All Risk car insurance covers everything that TLO does, as well as:

• Minor damage (scratches, dents, cracked glass),

• Minor collisions,

• Vandalism or mischievous acts by others,

• Damage due to natural disasters (if additional flood/earthquake policies are included).

5. Purpose and Use of the Vehicle

The final factor that differentiates them is the purpose of using the vehicle.

If your car is frequently used for daily activities on busy roads or parked in public areas, the risk of minor damage will be higher. In this case, All Risk insurance is more suitable because it can cover scratches and minor collisions.

However, if your car is rarely used, kept in a private garage, or you live in an area with a low-risk level, TLO insurance can be an efficient choice with a more affordable premium.

Read also: Toyota Car Service Cost Breakdown for Routine Maintenance

How to Choose the Right and Suitable Insurance
After understanding the difference between TLO and All Risk insurance, the next step is to determine which one suits you best. Here’s a guide to choosing the right car insurance based on your needs and vehicle condition:

1. Consider the Value and Age of the Vehicle

New vehicles with high market value should be protected with All Risk insurance, considering the financial loss can be significant even from minor damage.

Meanwhile, if your car is more than five years old or its market value has significantly decreased, TLO insurance can be a more efficient option. The principle is to match the type of insurance with the asset’s value you want to protect.

2. Calculate Your Financial Capability

The premiums for TLO and All Risk car insurance differ significantly. Therefore, it is important to adjust the premium to your financial condition.

3. Evaluate Your Living Area and Driving Activities

Your location also plays an important role in determining the suitable type of insurance. If you live in an area with a high theft risk, choose TLO insurance to focus on loss protection.

If you often drive in heavy traffic areas with a high potential for minor accidents, All Risk car insurance is more recommended.

4. Compare Policies and Additional Benefits

Each insurance company offers different additional benefits, such as:

• Flood protection,

• Riot protection,

• Replacement car during repairs,

• Free towing service,

• Third-party liability coverage.

Before signing a policy, make sure you understand the terms, conditions, and claim exclusions that apply.

5. Understand the Purpose and Long-Term Use of the Vehicle

Finally, think about how your car will be used in the long term.

If it’s used as a daily vehicle All Risk protection can provide complete peace of mind.

Conversely, if the vehicle is only used occasionally or as a collection, TLO insurance is sufficient. The right choice is not only about the premium but also about matching your lifestyle and protection needs.

Choose the Right Car Insurance for You

Understanding the difference between TLO and All Risk insurance will help you make a more mature financial decision. Both are equally important but have different protection focuses.

Make sure you’ve considered the car’s age, your financial capability, and the additional benefits offered by each policy. This way, you can enjoy peace of mind while driving without worrying about risks on the road.

Before planning your insurance protection, financial planning won’t be complete without a proper financing plan when buying a car. That’s why TAF is here to provide a safe and reliable solution.

Read also: 9 Car Loan Strategies for Online Drivers with Affordable Installments

Toyota Astra Financial Services (TAF) is a trusted partner in vehicle financing. TAF offers various services to help you own your dream car from new car loans and sharia financing to fleet financing and refinancing.

Through the car installment calculator feature, you can check car installment simulations at TAF with various down payment and tenure options according to your ability. TAF is committed to helping you own your Toyota safely, with an easy process and flexible payment options.

Contact TAF now and make your dream car come true with smart and trusted financing solutions!