Earthquake insurance in Indonesia — who needs it, who skips it

Your fire policy does not cover earthquakes. none of them do.

Here is the single most misunderstood fact in Indonesian property insurance: earthquake, volcanic eruption, and tsunami are excluded by default from every standard Indonesian fire and property policy. Not some policies. Every one. You live on the Ring of Fire, and the default product sold to you excludes the Ring of Fire.

Cover exists — it's just a separate, standardized policy that attaches to your fire or property all risks (PAR) policy and is reinsured through MAIPARK, the national earthquake reinsurance pool. You cannot buy it standalone: no fire policy, no earthquake cover. Which means the real question isn't whether earthquake insurance exists in Indonesia. It's whether your policy schedule has the attachment, and most don't: residential earthquake insurance penetration in Indonesia sits under 1%.

The government sets the price. literally.

Earthquake insurance in Indonesia is one of the few products where shopping around barely matters, because the tariff is government-fixed. Rates are set by regulation, no discounting is allowed, and every policy carries the same fixed deductible: 2.5% of the sum insured per claim. On a Rp 3.5 billion villa, that's Rp 87.5 million you carry yourself before the policy pays — earthquake cover is catastrophe protection, not crack-in-the-plaster protection.

What you pay depends on two things: your seismic zone and what your building is made of. Bali's busiest districts sit in Zone 4, the higher-rate band — Badung (Canggu, Seminyak, Uluwatu), Gianyar (Ubud), and Denpasar. Tabanan, Buleleng, and Karangasem sit in the cheaper Zone 3.

Note what the table rewards: engineering. A properly framed concrete structure pays roughly 40% less than the "other construction" rate. The tariff already knows what falls down.

Fire cover, construction class, and the thatch problem

Because earthquake cover attaches to a fire policy, the fire policy's details carry over. Under the SEOJK 6/2017 tariff, a dwelling of three storeys or fewer in Class 1 construction — non-combustible walls and roof — rates at 0.294–0.328‰ per year. Class 3 construction, meaning wood structures or alang-alang thatch roofs, roughly doubles that to 0.499–0.558‰.

The rate difference is not the problem. The problem is disclosure: declare your thatch-roofed yoga shala as Class 1 concrete and the premium saving is trivial while the consequence is total — undeclared thatch or wood construction is grounds for claim denial. In Bali, where half the architecture portfolio involves alang-alang, this is the quiet killer of property claims.

Insure the rebuild, not the Zillow fantasy.

The sum insured should be the cost to rebuild the structure — materials, labour, demolition, professional fees. Not the market value, and never the land. Land does not burn and rarely falls over.

Get this wrong in either direction and you lose. Over-insure and you pay premium on value the insurer will never pay out. Under-insure and the average clause bites: if you insure a Rp 4 billion rebuild for Rp 2 billion, you're deemed to be carrying half the risk yourself, and every claim — even a small one — is cut proportionally. A Rp 200 million repair pays Rp 100 million. The villa insurance calculator will give you a working rebuild estimate in about a minute.

Put together, here's an indicative worked example: a concrete private villa in Badung with a Rp 3.5 billion rebuild sum insured lands around Rp 8–10 million per year total — fire, earthquake, and flood endorsement combined. Roughly 60% of that is the earthquake attachment. On the asset it protects, that's about 0.25% a year to not lose the house.

When skipping is defensible and when it's denial

• Defensible: you rent. Your landlord's structure is your landlord's problem; your exposure is contents and liability.
• Defensible-ish: the building is a light timber structure cheap enough to rebuild from savings, and you've actually done that math.
• Denial: you own a multi-billion-rupiah concrete villa in Canggu and are saving Rp 5 million a year on the one peril the region is famous for. The 2018 Lombok sequence was next door. Under-1% penetration is not evidence earthquakes are rare; it's evidence most owners are uninsured.

If the villa earns rental income, the stakes compound — a quake that closes you for three months is a revenue loss on top of a repair bill. That's a different policy structure entirely, covered in insuring your Bali villa for short-term rental. And if you're still building, earthquake needs to be bought into the construction policy too — see does your kontraktor have CAR insurance. For the broader property landscape, browse the property category or get quotes with your rebuild number ready.

Common questions