10 Car Insurance Myths You Should Stop Believing
Published: October 21, 2019 | Updated: June 2, 2021 | Posted by: Venus Zoleta | Car Insurance
When it comes to car insurance, Pinoys worry a lot about the cost, coverage, and claims processing. But if you research and read up on car insurance myths and facts, you’ll realize that some of your assumptions about insurance could actually be incorrect.
Are your beliefs about car insurance accurate? Know the real score and be enlightened. Here are the car insurance myths in the Philippines that should be debunked.
Table of Contents
- 1. Car Insurance Premiums are Expensive
- 2. Red Cars are More Expensive to Insure
- 3. Car Insurance Cost is the Only Thing That Matters
- 4. Having CTPL Insurance is Good Enough
- 5. Comprehensive Car Insurance Automatically Covers Acts of Nature
- 6. Personal Car Insurance Covers Business Use of the Car
- 7. Car Insurance Covers Personal Items Inside the Vehicle
- 8. If Someone Else Drives My Car, That Person’s Insurance Must Cover the Damages
- 9. Claims Processing is Tedious and Complicated
- 10. Making a Claim Will Raise the Premium
- Final Thoughts
1. Car Insurance Premiums are Expensive
This is a sweeping generalization about car insurance costs in the Philippines. Although insurance premiums for certain vehicle types and models (i.e., luxury cars, sports cars, etc.) are higher, not all cars are expensive to insure.
You’d be surprised to learn that many cars in the Philippines can be insured for as low as PHP 7,000 to PHP 12,000 per year (equivalent to just PHP 1,000 or less per month). This is especially true for most hatchbacks and sedans from manufacturers like Suzuki, Honda, Mitsubishi, and Toyota.
Aside from choosing a car that’s cheap to insure, there are many other ways to reduce your car insurance premium. Picking your coverage carefully is one of them. You should pay only for add-ons you really need considering your driving habits and risk exposure.
Finding cheap car insurance is easy when you shop around using a comparison site like Moneymax. Simply enter information about yourself and your car, and the online tool will instantly show you quotes from various car insurance companies in the Philippines. You can quickly choose the best price for the coverage you need.
If you still think of car insurance as an unnecessary expense, consider this fact: it’s cheaper to pay yearly to get your car insured than to pay out of pocket for car repairs and medical bills after an accident.
2. Red Cars are More Expensive to Insure
Absurd as it may sound, people are actually searching for answers online about car insurance myths like red cars being more expensive to insure.
This misconception might come from statistics concluding red as one of the car colors with a higher risk of accidents (1), along with gray, silver, and blue.
But guess what—car insurance companies don’t base rates on whether a car is red, pink, or neon green. On car insurance application forms (and even request forms for quotes), insurers only ask for the vehicle’s year, make, and model, age, body type, and other pertinent information. Color is not one of them.
3. Car Insurance Cost is the Only Thing That Matters
Of course, the annual premium is a crucial factor for Filipinos when deciding the right car insurance for you—after all, it’s impractical to buy a policy you can’t afford. But the cost shouldn’t be the only consideration.
What’s the use of a cheap car insurance policy if it doesn’t provide enough coverage? You could only end up losing more money when you meet an accident.
When comparing car insurance policies, look not only at the prices but also the types and amount of coverage included, as well as the exclusions and limitations. It’s also important to check how the insurance company handles claims processing request and other customer service-related matters.
4. Having CTPL Insurance is Good Enough
One of the car insurance myths that many Pinoy drivers believe in is that buying comprehensive third party liability (CTPL) insurance means their vehicle is properly insured. After all, this is what the law requires before you can register your car with the LTO.
However, the protection you’ll get from CTPL insurance is rather limited. It covers only the injury or death of third parties (excluding the insured’s family and household members) in an accident involving the insured vehicle. The maximum financial assistance is only PHP 100,000.
CTPL doesn’t cover other liabilities such as damage to the vehicle and third-party property, as well as death or injury of the driver and passengers. For more financial protection against such risks, you need to get comprehensive car insurance.
5. Comprehensive Car Insurance Automatically Covers Acts of Nature
It’s wrong to assume that all comprehensive car insurance policies include an Acts of Nature (AON) or Acts of God coverage. Just because it’s “comprehensive,” doesn’t mean it insures cars against all types of damage such as those caused by natural disasters.
Typically, car insurance providers in the Philippines offer AON coverage as an add-on. It isn’t available as a stand-alone policy, which means you have to purchase it on top of a comprehensive car insurance policy.
6. Personal Car Insurance Covers Business Use of the Car
If you have a commercial vehicle or a personal car for product delivery (or any business purpose), you need to get business car insurance. Personal car insurance policies don’t cover business use, and your claim will likely be denied if the accident happened while you’re driving your car for a business purpose.
Read more: Why Should You Get a Business Car Insurance?
7. Car Insurance Covers Personal Items Inside the Vehicle
Unfortunately, comprehensive car insurance policies don’t cover valuables such as cash, laptops, and cellphones left inside an insured car that’s stolen or damaged by fire or a fallen tree.
You’ll have to purchase an optional benefit, called the Personal Effects coverage, to insure personal belongings in your car. If you don’t want to pay for that, then avoid leaving your valuable items unattended inside your vehicle.
8. If Someone Else Drives My Car, That Person’s Insurance Must Cover the Damages
If you lend your car to your brother and he gets into an accident, your insurance provider—not the other person’s insurance—will pay for the damages, regardless of who is driving. Thus, think twice before letting somebody else drive your car.
9. Claims Processing is Tedious and Complicated
This is one of the car insurance myths that no longer hold true today. Car insurance companies in the Philippines have made claims processing easier and simpler for their customers.
If you purchased car insurance through Moneymax, you can get assistance for processing your claims request and enjoy a hassle-free claims experience.
As long as you submit the complete requirements, the claim period lasts for only three to seven working days.
10. Making a Claim Will Raise the Premium
Filing a car insurance claim this year doesn’t necessarily result in a higher premium next year. Car insurance companies evaluate various factors before deciding to adjust your premium, such as how frequent you file a claim, the total amount paid for your claim, and whether or not you’re at fault.
Your car insurance rate will likely remain the same, unless you made a very expensive claim or multiple claims in just one year—which means you’re a high-risk and should pay a higher premium.
Got more apprehensions or misgivings about car insurance? Chances are, you’re a first time driver and have no experience yet when it comes to getting your car insured. Don’t fall for car insurance myths. Educate yourself more about car insurance in the Philippines by browsing this Moneymax blog.
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Venus is the Head of Content at Moneymax, with 15+ years of experience in digital marketing, corporate communications, PR, and journalism. She invests in stocks, mutual funds, VUL, and Pag-IBIG MP2. Outside of work, she’s crazy about cats and Korean dramas. Follow Venus on LinkedIn.