Bali Villa Insurance: What Foreign Owners Need

A Bali villa needs at minimum a PSAKI fire policy, which covers fire, lightning, explosion, and smoke, plus two riders most owners overlook: EQVET for earthquake, volcanic eruption, and tsunami, and FTSWD for flood and storm. Earthquake cover matters because standard PSAKI and Property All Risk (PAR) policies both exclude seismic events by default, and Indonesia sits directly on the Pacific Ring of Fire.

Indonesian property insurance is governed by OJK (Otoritas Jasa Keuangan) under Law No. 40 of 2014, with policy standards set by AAUI (Asosiasi Asuransi Umum Indonesia). The base PSAKI covers five named perils: fire, lightning, explosion, aircraft impact, and smoke. A Property All Risk (PAR) policy adds riot, strike, and malicious damage, plus usually flood and storm, but the EQVET earthquake endorsement remains excluded even from PAR and must be added explicitly. Premium rates for earthquake cover are set by OJK Circular Letter SEOJK 6/2017, which establishes minimum and maximum rates by province and seismic zone. Bali falls in a high seismic risk zone, so earthquake premiums run higher than for properties in lower-risk parts of Indonesia.

Annual premiums for base property cover run roughly 0.1% to 0.35% of the insured value, with the earthquake rider added on top. For a villa insured at around IDR 2 billion, that puts the base annual premium in the range of IDR 2 million to IDR 7 million, depending on construction class, location, and the covers chosen. These are indicative market figures from Bali property advisers, not a binding quote. Get proposals from two or three OJK-licensed insurers or work with a licensed Indonesian insurance broker. This article is general information, not financial or insurance advice.

If you rent the villa short-term, add third-party liability cover (Tanggung Gugat Pihak Ketiga). It covers bodily injury or property damage to guests and neighbouring properties. Limits of IDR 500 million to IDR 2.5 billion are available, at an additional cost of roughly 0.1% to 0.3% of the chosen limit per year.

Both PT PMA companies and leasehold holders qualify as policyholders. A PT PMA is an Indonesian legal entity and can be named insured with any OJK-licensed insurer. A leasehold holder insures the building improvements representing their economic interest, even though the land title stays with the Indonesian landowner. One compliance note: a villa operating without a valid PBG (Persetujuan Bangunan Gedung) and SLF (Sertifikat Laik Fungsi) risks having a claim voided, since unlicensed commercial use can breach policy conditions. Get your permits in order before relying on cover. See also how to set up a PT PMA if you are considering the corporate ownership route.