Did You Know? - Material Facts

Did you know, what is a “Material Fact” and why is it so important? When applying for insurance, you will be asked to disclose all Material Facts that could affect the risk because the law assumes you know everything about the risk you wish to insure while the Insurer does not.

What is a Material Fact? A Material Fact is important information regarding the insured object and risks to be transferred from the Insured to the Insurer. Such information is required by the Insurer to determine the acceptance policy, the premium rates to be applied, and the composition of the coverage’s terms and conditions.

In The Indonesian Motor Vehicle Insurance Standard Policy (PSAKBI), the provision regarding any material fact are mentioned in Chapter IV about Conditions, Article 6, Paragraph 1, Point 1.1, which said:

The following are some examples of Material Facts that must be provided by the Insured to the Insurer, when viewed from the types of Motor Vehicle Insurance product:

1. The information of the type, model, year, and important data of the vehicle to be insured.
2. Disclosure about the use of the motor vehicle, whether it is for private use or commercial use.
3. Any losses that have been experienced, etc.

The obligation to provide Material Fact is valid since:

1. When the agreement regarding the insurance policy is discussed, until the policy is completed.
2. At the time of renewing the insurance policy.
3. When there is a change in the insurance contract, regarding things that are related to changes in the insured object.
4. Also, in the claim settlement process without hiding the clear and correct information required by each party.

In case of non-disclosure or misrepresentation of Material Facts, the Insurer has a right to repudiate to compensate in the event of a claim, or even to terminate the insurance contract. On the other hand, the Insurer will also be truthful in terms of the ability or inability to cover the said insured objects.

Subsequently, for your convenience, kindly review your policy to ensure that the coverage provided is suitable for your need. Shall there is any changes required on the information of your personal details, the scope of coverage, or you need other information or clarification about terms and conditions of your policy, please feel free to contact us at 021 - 2523110 and we would be pleased to assists you.