Insurance Claim Denied in Indonesia: OJK Complaint Guide

Understanding Insurance Claim Denials in Indonesia

Indonesia's insurance market is the largest in Southeast Asia by population, with tens of millions of policyholders holding life, health, motor vehicle, and property insurance products. As the market has grown, so too have the number of claim disputes — and the Indonesian government has put in place a sophisticated regulatory and dispute resolution framework to protect consumers.

If your insurance claim has been denied in Indonesia, you have formal rights and multiple channels available to challenge that decision. This guide covers everything you need to know: why claims get denied, what the regulator OJK does, how to use the LAPS-SJK dispute resolution mechanism, and how to avoid the most common mistakes.

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Why Insurance Claims Get Denied in Indonesia

Insurers in Indonesia deny claims for a range of reasons, some legitimate and some that can be successfully challenged:

1. Non-disclosure of material information. Under Law No. 40 of 2014 on Insurance (the Insurance Law), policyholders are required to disclose all material facts truthfully during the application process. Insurers frequently deny claims — or void policies — citing alleged non-disclosure of pre-existing conditions, undisclosed occupations, or prior claim histories.

2. Policy exclusions. Indonesian insurance policies typically exclude pre-existing conditions, suicide, war, nuclear events, and losses caused by intentional acts. Insurers sometimes apply these exclusions expansively.

3. Late claim notification. Most Indonesian insurance policies require claimants to notify the insurer within a specific period — commonly 3 to 14 days for motor vehicle claims and 30 days for other claims. Late notification is frequently cited as grounds for denial.

4. Incomplete documentation. Claim denials due to missing or inadequate supporting documents are among the most common in Indonesia. Medical insurers, in particular, often require very detailed hospital records, doctor statements, and itemized bills.

5. Disputes about cause of loss. For motor vehicle and property claims, insurers may deny coverage if they determine the cause of loss falls outside covered perils — for example, arguing that damage was due to wear and tear rather than an insured accident.

6. Policy lapse due to premium non-payment. If premiums were not paid and the policy was in lapse at the time of the claim, the insurer will deny the claim. However, Indonesian law provides grace periods, and disputes about whether a policy was truly in lapse are common.

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The Regulatory Framework: OJK

The Otoritas Jasa Keuangan (OJK) — the Financial Services Authority — is the primary regulator for Indonesia's insurance industry. OJK was established by Law No. 21 of 2011 and took over insurance supervision from the Ministry of Finance in 2012/2013. OJK licenses all insurance companies, sets conduct standards, and handles consumer complaints.

OJK Website: https://www.ojk.go.id

OJK Consumer Services Hotline: 157 (toll-free, available Monday to Friday 8:00 AM – 5:00 PM WIB)

OJK Consumer Complaint Portal: https://konsumen.ojk.go.id

OJK can investigate complaints, order insurers to take corrective action, and impose administrative sanctions on non-compliant insurers. Filing a complaint with OJK is free for consumers.

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LAPS-SJK: Alternative Dispute Resolution for Insurance Disputes

In addition to OJK's complaint mechanism, Indonesia has a dedicated alternative dispute resolution body for financial sector disputes: LAPS-SJK (Lembaga Alternatif Penyelesaian Sengketa Sektor Jasa Keuangan — Alternative Dispute Resolution Institution for the Financial Services Sector).

LAPS-SJK Website: https://www.laps-sjk.id

LAPS-SJK was established pursuant to OJK Regulation No. 61/POJK.07/2020 and integrates several previously separate industry ADR bodies. It provides:

• Mediation: A neutral mediator helps both parties reach a voluntary settlement. This is free for consumers.
• Adjudication: For claims below a certain value threshold (generally IDR 750 million for certain dispute types), LAPS-SJK adjudicators issue binding decisions.
• Arbitration: Available for larger disputes.

LAPS-SJK is particularly useful when OJK mediation has failed or when you want a binding outcome without going to court.

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Step-by-Step: How to File a Complaint

Step 1: Formal Internal Appeal to Your Insurer

Before approaching OJK or LAPS-SJK, submit a formal written appeal to your insurer's customer service and claims department. Your appeal should:

• Clearly identify the policy number and claim reference
• State the specific grounds on which you believe the denial is wrong
• Reference any relevant policy provisions or OJK regulations
• Attach all supporting documents
• Request a written response within 14 working days (the maximum response time under OJK consumer protection rules)

Keep copies of everything, including proof of delivery.

Step 2: Escalate to OJK if the Insurer Does Not Resolve

If your insurer fails to respond within 14 working days, or if their response still denies the claim without adequate justification, file a complaint with OJK through the consumer portal at konsumen.ojk.go.id.

To file:

1. Register or log in to the OJK consumer portal.
2. Select "Insurance" as the financial sector and complete the complaint form.
3. Upload all supporting documents (policy, denial letter, your appeal, insurer's response, evidence).
4. Submit and retain the complaint reference number provided.

OJK will acknowledge your complaint and forward it to the insurer. The insurer is required to respond to OJK within a set period. OJK may facilitate mediation between the parties.

Step 3: Escalate to LAPS-SJK

If OJK's mediation does not result in a satisfactory resolution, escalate to LAPS-SJK. File an application through their website at laps-sjk.id. You will need:

• OJK complaint reference number (proof that you attempted resolution through OJK)
• All previously submitted documents
• A completed LAPS-SJK application form

LAPS-SJK will schedule mediation. If mediation fails, the dispute can proceed to adjudication or arbitration, depending on the claim amount and agreement of parties.

Step 4: Court Proceedings

If all ADR mechanisms fail, you may pursue your claim through the Indonesian courts. The District Court (Pengadilan Negeri) has jurisdiction over insurance contract disputes. For smaller amounts, the Small Claims procedure may be appropriate. Legal representation is strongly recommended for court proceedings.

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Important OJK Consumer Protection Regulations

OJK has issued several regulations that directly benefit insurance consumers:

• POJK No. 23/POJK.05/2015 on the Business Administration of Life Insurance Companies — sets minimum standards for claims handling, including required timelines.
• POJK No. 1/POJK.07/2013 on Consumer Protection in the Financial Services Sector — establishes the general complaint framework, including the 14-working-day response requirement.
• POJK No. 61/POJK.07/2020 on LAPS-SJK — governs the alternative dispute resolution mechanism.

When writing your appeal or complaint, referencing the specific POJK regulation your insurer has violated strengthens your case significantly.

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Common Mistakes Indonesian Policyholders Make

Not keeping a copy of the policy document. Many Indonesians cannot locate their original policy when a claim arises. Always store a digital copy in your email or cloud storage.

Relying solely on verbal communications with agents. Insurance agents often make verbal promises that are not reflected in the policy. Only the written policy document governs the insurer's obligations.

Waiting too long. Indonesian insurance law has limitation periods. Act promptly — both for internal appeals and for OJK/LAPS-SJK filings.

Not using the 157 hotline. The OJK hotline is free and staffed by consumer protection officers who can guide you through the complaint process in Bahasa Indonesia.

Signing a settlement release without reading it. If an insurer offers a settlement, ensure you understand whether signing releases all future claims on the same event.

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Drafting Your Appeal Letter

A well-structured appeal letter is one of your most powerful tools. It should reference the specific denial reason, cite the relevant policy clause, outline why that denial is factually or legally incorrect, and clearly state the remedy you seek. ClaimBack at claimback.app helps policyholders generate professional insurance appeal letters tailored to their specific situation. The tool is fast, practical, and produces letters that reference the correct regulatory framework — saving you time and improving your chances of success.

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Conclusion

A denied insurance claim in Indonesia is a serious matter, but it is far from the final word. The OJK and LAPS-SJK provide a layered, consumer-friendly dispute resolution system that is free to access and backed by real regulatory enforcement power. Act promptly, document every step, exhaust internal channels first, and then escalate systematically through OJK and LAPS-SJK. Use every available tool — including ClaimBack at claimback.app — to build the strongest possible appeal.