A CAR policy in Indonesia is structured in 2 sections. Section I — Material Damage covers sudden and unforeseen physical loss or damage to the contract works, including materials on site, temporary structures, and property forming part of the build, from any cause not specifically excluded. This includes fire, flood, storm, collapse, theft, and accidental damage. The insurer indemnifies by cash payment, repair, or replacement at their option, up to the contract value declared in the schedule. Section II — Third Party Liability covers your legal liability for accidental bodily injury or property damage suffered by third parties: neighbours, passers-by, visitors, occurring in direct connection with the construction works, on or in the immediate vicinity of the site. Legal costs and litigation expenses are also covered under Section II with insurer consent. A standard CAR policy in Indonesia also includes debris removal (typically up to 5% of contract value).

A CAR policy does not cover everything. The main things excluded are: poor workmanship or defective materials (the faulty item itself), wear and tear, mechanical breakdown of equipment, and any losses caused deliberately by the insured. Penalties or financial losses due to construction delays are also not covered. One practical point most people miss: the policy must be in place before construction starts. If you try to insure a project already 20% or more complete, insurers will decline or exclude prior damage. The earlier you place the cover, the better.

Yes — a well-structured CAR policy should name both the project owner and the main contractor as co-insured. This avoids disputes over who can make a claim if something goes wrong on site. Subcontractors can also be included. One important gap to know: the policy does not cover injuries to the contractor's own workers. That requires a separate Personal Accident or Workmen's Compensation policy. BPI can arrange both together.

You must notify your insurer within 14 days of the incident, by phone and in writing. Missing this deadline can void your claim entirely. You then provide documentation (photos, invoices, repair quotes) and the insurer assesses the damage before authorising repairs. Settlement is based on the actual cost of restoring the works to their condition before the loss. For a total loss, it is the value of the item at the time of the event. The insurer pays once repairs are confirmed and invoices are submitted. BPI helps manage this process for all clients, from first notification through to final settlement.

CAR insurance is priced as a percentage of your total construction budget. Rates typically sit between 0.10% and 0.25% for the full project period, including the maintenance phase after handover. Third Party Liability is usually included within this rate at no extra cost. As a real example: a villa project on Nusa Penida worth IDR 6.7 billion cost IDR 10 million in premium, covering 18 months of construction plus 3 months maintenance. For most villa and commercial builds in Bali and Lombok, total premiums fall between IDR 5 million and IDR 25 million for the entire project.