We cannot deny the fact that having car insurance or auto insurance is as important as having a driver’s license. Every driver needs protection through a proper insurance policy. However, finding the best option from several car insurance providers is quite a challenge. The key to getting the best policy is to find out which coverage is best suited for your needs. We’ve listed some important points below to help you understand more about car insurance in the Philippines and to help you make the right purchase decisions.
Automobile or car insurance is an absolute necessity to anyone who owns and drives a car. The potential costs surrounding an accident are too overwhelming — may that be hospitalization costs of the victims or repair/replacement costs of the car or other property. Purchasing car insurance is your best way to manage such financial risk. Car insurance companies or insurers prepare for this risk by charging you premiums and keeping a large sum of money in reserve. In the event of a claim, these companies should have the money to pay for.
Read our comprehensive guide for more information about how car insurance works.
One important thing you have to know about car insurance is that it is required by the Philippine law. Compulsory Third Party Liability Insurance (CTPL) is a minimum mandatory requirement for owning and driving a vehicle. The law requires this for the registry of all types of vehicles. More so, driving without insurance entails hefty penalties as it is considered a serious crime.
Read our comprehensive guide for more information about Compulsory Third Party Liability Insurance.
Compulsory Third Party Liability Insurance
Vehicle owners are required by law to secure a CTPL. This type of insurance is the minimum requirement or prerequisite to vehicle registration with the Land Transportation Office. If you are at fault in an accident, CTPL will cover your liability in respect to bodily injury, death, or damage to property.
This policy covers the car repair expenses or replacement of your vehicle in case of road accident, whether you are at fault or not. If the cost of repair is more than the value of your vehicle, your insurer will pay to replace it based on its current market value.
Aside from damages incurred due to collision, comprehensive coverage is an auto insurance component that also covers damages caused by other incidents including theft, fire, vandalism, weather, falling objects and animal damage. This is considerably the most expensive among the other types of car insurance. Read our guide for more information about comprehensive car insurance.
Medical Payments Coverage
This type of coverage will pay for you and your passengers’ medical expenses in case of an accident, regardless of who is at fault.
Personal Injury Protection Coverage
Personal injury protectionis basically an expanded form of medical coverage. Regardless of who is at fault, this coverage pays for expenses related to injury (not necessarily medical) such as lost wages, childcare, and funeral costs.
Other Coverage Options
Aside from standard coverage that insurance providers offer, you have the choice to include additional features such as new car replacement, breakdown insurance, no claim bonus, and uninsured/underinsured motorist insurance.
Age and Gender
Statistically, young men, especially teenagers, are more likely get involved in car accidents than young women.The former thus pay higher rates than the latter. Older men, on the other hand, are perceived to drive safer than older women.
Your Marital Status
Married people, especially men, tend to have fewer accidents as compared to single people. Thus, married people can significantly lower their insurance rate. Even so, how much your rate decreases still depends on your previous driving record. If you have never been into an accident and maintained a good driving record, then expect a considerably lower rate.
Your Location and Driving Practices
Where you live and where you park your car are important factors in deciding the rate of your insurance. If you live in rural area with little to no traffic, you are likely to get lower rates. If you live in densely populated area, on the other hand, where you are at higher risks of theft, accident, collision and whatnot, then you may get substantially higher rate. Other than your location, the total distance that you drive in every year, the purpose of using the vehicle (whether for personal or for business), the distance you travel each day to get to work, the number of people who drives your vehicle — all these factor in the calculation of your premium.
The Type of Vehicle You Own
In principle, a less expensive car is cheaper to insure. The same thing applies if your car is equipped with safety features and is deemed to be less prone to accidents. The make and model of your car will also affect your rate as insurers consider the repair and replacement cost. For instance, if you own a sports car that is often expensive to fix or repair in case of an accident, then the insurer is likely to charge you with higher premiums. Therefore, the fancier your car is, the higher you pay.
Your Driving Record
Your claims history and your driving record will indicate insurers your level of risk to accidents. The more claims or accidents and violations you have, the higher your premium will be.
Your Car’s Safety Rating
The likelihood of theft is considered in determining your premium. In theory, there are cars that are more attractive to thieves than the others. If the insurer finds your car likely to be stolen, then expect a higher premium. But if your car is equipped with anti-theft features, you have higher chances of getting a substantial discount.
Below are some helpful tips for buying car insurance:
Shop around and compare coverage quotes
Determine what type of coverage you need
Educate yourself about the benefits of car insurance
Know the details of your car (the make, the model, etc.)
Assess how much you can afford
Check and research about the credentials of the company you are entrusting your insurance with
Find ways to lower your premium and negotiate
Take advantage of discounts
Know what you are getting – read and analyze the fine print of your policy
Provide your details
Compare the products
Get the best option for you
MoneyMax.ph is your one-stop shop for comparing car insurance, credit cards, and loans. Use our powerful comparison tool to get unbiased, up-to-date information and the best deals.
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