In this blog, we’ll dive into why property insurance is vital to protect your villa and ensure peace of mind for owners. With insights from Bali Property Insurance, a trusted partner in property insurance for Bali villas, we aim to equip you with the knowledge you need to protect your valuable investment. A trusted partner in property coverage, we strive to equip you with the knowledge you need to protect your valuable investment.

The Reality of Natural Disasters in Bali

The risks of earthquakes and flooding often overshadow Bali's natural beauty. Due to the region's geological characteristics, earthquakes can occur without warning, leading to substantial damage to properties. According to BMKG, Bali experiences an average of 99 earthquakes annually (based on 2023 data), some of which can cause significant damage to structures.

Flooding, especially during the rainy season, can further worsen this risk, threatening the villa and its contents. Having reliable Bali villa property insurance can provide essential protection against the financial impact of these natural disasters. It ensures that your investment remains intact and you can recover quickly from unexpected events.

1. Fire Protection

Many villas in Bali feature unique architectural designs, often incorporating traditional materials such as bamboo and wood. While these natural materials contribute to these properties' aesthetic appeal and charm, they also come with inherent risks.

Bamboo and wooden structures are beautiful and sustainable but more vulnerable to fire hazards. The natural oils in bamboo and the cellulose in wood can make these materials flammable, especially during the dry season or in the event of a nearby fire. Additionally, the tropical climate can contribute to conditions that promote fire spread.

Fire insurance for Bali villas plays a vital role in protecting against fire damage. Fire insurance for Bali villas plays an essential role in protecting against fire damage. Property insurance plays a crucial role in protecting against fire damage. A thorough insurance policy can cover repairing or rebuilding your villa in the unfortunate event of a fire. This coverage helps you recover financially and ensures your investment can be restored to its former glory, allowing you to continue enjoying or renting out your villa.

2. Protection Against Theft

Many villas in Bali feature large windows and open layouts that embrace the natural surroundings, offering stunning views and a sense of openness. While these design elements create a welcoming atmosphere, they can also present security vulnerabilities vulnerabilities regarding security. The allure of a beautiful villa can attract opportunistic thieves, especially during peak tourist seasons. 

Ensuring that your villa is protected against theft is essential. This can include installing security systems, utilizing smart home technology, and securing all entry points. Moreover, having theft protection for Bali villas as part of your insurance policy can provide peace of mind, knowing you have financial protection in case of any unfortunate incidents. Moreover, having property insurance can provide peace of mind, knowing you have financial protection in case of unfortunate incidents.

3. Ensuring Continuous Rental Income

For many villa owners, maintaining a steady flow of rental income is significantly important. Unexpected events can disrupt this income stream, making it essential to have sufficient protection in place. A comprehensive insurance policy, such as The Zurich Insurance Platinum Package, offers business continuity coverage, ensuring that you won't lose income even if your villa requires repairs or becomes uninhabitable even if your villa requires repairs or becomes uninhabitable, you won’t lose suffer a loss of income.

With Zurich’s support, you can receive daily compensation of 500,000 IDR for up to 90 days, providing financial stability during unforeseen disruptions. This protection allows you to navigate challenging times confidently, helping you safeguard your investment and plan for the future without fear of navigating challenging times with confidence, helping you preserve your investment and plan for the future without fear of financial instability.

4. Attracting Renters with Insurance

Property insurance protects you and not only protects you but also enhances your villa's appeal to potential renters. In today's rental market, guests are increasingly aware of the importance of safety and security. Properties with extensive villa insurance coverage in Bali are more attractive to renters, as they provide reassurance that their safety and comfort are prioritized.Properties with comprehensive insurance coverage are more attractive to renters, as they provide reassurance that their safety and comfort are prioritized.

This added assurance can set your villa apart in a competitive rental market, making it more likely that you'll secure bookings and generate rental income.

Simplifying Your Insurance Journey

Getting property insurance for Bali villas is straightforward but requires some preparation. Getting property insurance is straightforward, but it requires some preparation. Here’s what you’ll typically need to provide:

- A photo or Airbnb link of your villa

- The exact address or Google Maps link

- Estimated building value (in IDR)

- Estimated contents value (in IDR)

- Desired liability coverage (IDR 500 million to 2.5 billion)

Protect Your Investment Before It’s Too Late

Investing in Bali villa property insurance is not just a safety net—it's a vital component of responsible villa ownership in Bali. By understanding the risks and securing the right coverage, you can protect your investment and enjoy the beauty of Bali with peace of mind. Collaborating with experts like Bali Property Insurance and Bali Home Immo can help you navigate the complexities of property ownership, ensuring that your villa remains a source of joy and income for years to come.

When it comes to leasehold properties in Bali, the good news is that you can lease a property with any kind of Visa, including a tourist Visa. Unlike other forms of property ownership, leasehold doesn't require foreign nationals to register a company or obtain a residence permit in Indonesia. This makes the process much more accessible and straightforward for those looking for leasehold properties in Bali.

Leasehold villa in Canggu.

Photo by Bali Home Immo

In Bali, leasehold ownership grants you full control over the property for a specified amount of time, typically 25 years, although contracts for up to 30 years are not unusual, as well as negotiated extensions of 10-20 years. This flexibility, attractive price, and ease of acquiring a leasehold property have made it a popular choice for foreigners looking to invest in Bali's vibrant property market.

Right to Build (Hak Guna Bangunan/HGB)

On the other hand, if you are considering acquiring a freehold property in Bali through a foreign-owned company, known as a PT. PMA (Perseroan Terbatas Penanaman Modal Asing), a specific visa is required. The title you will get through PT PMA is an HGB (Hak Guna Bangunan) title, which will allow you to fully own property for up to 70 years. The 70 years comprises 30 years of initial validity + 20 years of extension + 20 years of renewal. 

And the great thing about this title is you can pass the HGB title to another company or sell it to Indonesian nationals and convert the HGB title to the Hak Milik title, which makes the property remains highly valuable to Indonesian nationals. You can also buy several properties under the name of the company and use them to operate as a business.

HGB title is excellent to build a villa or apartment complex.

Photo by Bali Home Immo

To acquire a freehold property through a PT. PMA, first, you’ll have to register a new PT PMA or acquire an existing one, you can set up a 100% foreign-owned PT PMA in the Hospitality Management Consulting category for a short-term villa rental or the Real Estate category for a long-term villa rental. You can acquire property in the name of your PT PMA immediately after the company’s Articles of Association have been approved and the company’s tax card has been issued which usually takes around 2-3 weeks.

Second, you must obtain a specific visa called a "KITAS" (Kartu Izin Tinggal Terbatas), which is a limited stay permit. It is important to note that the process of obtaining a KITAS can be more complex and time-consuming compared to leasehold properties. Working with a reputable legal and consulting firm specializing in foreign investments can greatly assist you in navigating through the necessary procedures and requirements.

Right to Use (Hak Pakai)

The Hak Pakai title has some similarities to HGB. Those similarities include:

1. Foreigners need to have a residence permit/KITAS.
2. Ownership validity of up to 70 years, comprises 30 years of initial validity + 20 years of extension + 20 years of renewal.
3. Family can inherit the title
4. Can be sold to Indonesian nationals and converted to Right to Own title (Hak Milik)

Besides those similarities, the Hak Pakai title doesn’t require you to own a PT PMA and can be bought individually. However, several limitations made many foreigners not choose this title:

1. Hak Pakai title only let you own land that has a building on it.
2. Limitations to operating as a business
3. A minimum property value of 5 billion rupiahs for a building built on land, and 2 billion rupiahs for an apartment.
4. Can only buy a single property.

Right to Own (Hak Milik)

Hak Milik title is hereditary, permanent, and valid for a lifetime. Basically, the Right to Own is the strongest property title that people can have over land in Indonesia.

A Hak Milik title can be transferred to another party through inheritance or purchase. However, Hak Milik is only owned by Indonesian citizens and legal entities that have met the requirements.

Only Indonesian citizens can own Hak Milik title.

Photo by dashu83 on Freepik

Foreigners who acquire property rights by inheritance without a will or by marital property mixing, as well as Indonesian citizens who have property rights but lose their citizenship, must relinquish their property rights within one year of acquiring the rights or losing their citizenship.

In summary, if you are interested in leasehold properties in Bali, you can proceed without needing a specific visa. The leasehold agreement, which grants you temporary ownership, can be established without the complexities associated with obtaining a residence permit or registering a company. However, if you have your sights set on acquiring a property through a PT. PMA, it is crucial to ensure that you meet the necessary visa requirements and comply with Indonesian regulations.