Jakarta. The Financial Services Authority (OJK) has mandated that all motor vehicles, including motorcycles and cars, must carry third-party liability (TPL) insurance.

Ogi Prastomiyono, OJK's Executive Director of Insurance, Guarantee, and Pension Funds Supervision, noted that while vehicle insurance is currently voluntary, the Financial Sector Development and Strengthening Act (PPSK) could soon make it mandatory for all car and motorcycle owners.

"Government regulations to enforce mandatory insurance are expected to align with the PPSK Act within 2 years, by January 2025, requiring all vehicles to have TPL," Prastomiyono said on Thursday.

He emphasized that mandatory TPL insurance is already a standard in various other countries, particularly within ASEAN.

TPL insurance is seen as essential for motor vehicles due to its communal benefits. It helps mitigate losses in traffic accidents involving multiple parties.

TPL insurance covers the policyholder against legal liabilities arising from accidents where their vehicle causes injury or damage to another person's property. This can include medical expenses, repair costs, or legal fees if the policyholder is sued.

However, Prastomiyono highlighted challenges in implementing TPL insurance, especially concerning operational mechanisms. Establishing a system to track insurance coverage for each vehicle requires coordination with the police responsible for vehicle registrations and insurance companies.

"Premium rates will be influenced by the number of participants. More participants in mandatory insurance will lower premiums for each individual," he explained.