Car Insurance Glossary

This glossary will help you understand the technical terms that you will encounter when you compare auto insurance policies in the Philippines.

Looking for answers to general questions about getting car insurance? Then you might want to head on over to our car insurance FAQ page.


Any unexpected incident that causes undesirable events such as death, injury, loss, or property damages, e.g. car accidents.

Anti-Theft Device

Any device used to prevent theft and extreme damage to a vehicle. It can be in the form of alarms, immobilizers or motion detectors.


A voluntary legally binding agreement between two or more parties wherein rules and terms are properly defined and obligations are enforceable by law.


The detailed list of benefits and protection that insurers are required to deliver to the policy holder in the event of a claim.


A request for payment to compensate for damage, loss or injury, according to the insurance coverage specifically and explicitly stated under the terms of the insurance policy.

Comprehensive Cover

An insurance component that is an extension of third party property coverage to your own vehicle and property. This coverage pays for car loss or damage resulting from an accident, fire or theft. It usually includes costs of repair or replacement of the car, transportation costs and damages caused by uninsured drivers.

Compulsory Third Party Liability Insurance (CTPL)

Car insurance that is a minimum mandatory requirement for owning and driving a vehicle in the Philippines. CTPL covers third party liability in respect to bodily injury, death or damage to property.


Loss or harm to a person or property.


A proportionate deduction from your premium if you and your car satisfy certain conditions that are deemed to reduce the insurer's expenses in the event of a claim.

Driving Record

An official record given to every driver. This is determined by the driver's experience, past accidents, traffic tickets (e.g., speeding, DUIs), as well as driving training. Insurers use this record to determine a driver's premium and verify policy application.


The amount you are required to pay upon a claim. The balance of the loss shall be paid by the insurer in respect to the policy limits.


Refers to additional coverage options on top of the protection provided by your main policy.

Fire and Theft (Cover)

An extra feature or a coverage component of an auto insurance policy. This coverage compensates for losses incurred from fire and theft.


An organization or company that offers insurance products. Most of the insurance products they offer can protect your assets in any untoward incidents that may cause loss, injury and damage of life and property.

Market Value

The valuation of your vehicle which is determined by market demand and sales. It is defined as the cost that is used for replacement of your vehicle in case of an accident or loss, taking into account the current condition of the car based upon its age, make and mode.

No Claim Bonus

If you have not made a single claim through a year, you get rewarded with a no claim bonus. This is a feature common to comprehensive insurance policies where you can either get a discount on your premium, or if you pay an extra, you can protect yourself from being fined for a single claim.


Policy is a general term that refers to a contract of agreement between a potential insurance holder and the insurance provider.

Policy Term

Policy term refers to the amount of time of a policy’s validity.


The amount of money paid to the insurer in return for insurance protection. For auto insurance, a vehicle owner pays an insurance provider a fixed premium amount in exchange for protection to cover any economic losses incurred under certain scopes and terms specified in an agreement.

Car/Vehicle Replacement

Car/vehicle replacement is a feature of car insurance policies which requires the insurer to replace the registered vehicle or pay the insurer an amount equivalent to the original value of the vehicle.


A quantifiable probability or threat of injury, loss, damage, liability, or any other undesirable circumstances caused by inside and outside factors.

Third Party

An individual person or group of persons not directly involved in a situation or agreement, in this case, the insurance policy.

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