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February 17, 2020
Owning a car entails many responsibilities. Before you can even drive it, you need to accomplish basic requirements such as vehicle registration and car insurance coverage. While registering your car is a more straightforward task, getting a car insurance in the Philippines can get more complex.
It requires you to do some research on car insurance, determine the coverage your vehicle needs, and choose an insurance company that offers the best deals. But don’t let the process discourage your from insuring your car. Learn everything about car insurance in the Philippines through this beginner-friendly guide.
Let’s start with the basics. There are two types of car insurance: Compulsory Third Party Liability (CTPL) and Comprehensive Car Insurance (Compre). It’s important to establish right off the bat that both types are equally essential. While it’s true that you only need to buy one, we highly recommend you to get both insurance policies to better protect you and your car. Let’s break down the difference between the two.
Compulsory Third Party Liability insurance is the most basic and least expensive car insurance in the Philippines. It is a government-mandated insurance policy that covers both private and public vehicles. Every vehicle owner in the country is required to buy this policy. You need to secure a CTPL insurance first before registering your vehicle with the Land Transportation Office (LTO).
CTPL insurance rates differ by length of coverage and type of vehicle. Below are the annual rates mandated by the Department of Finance’s Insurance Commission.
Private Vehicles: PHP 650.40
Light and Medium Trucks (not exceeding 3,930 kg.): PHP 700.40
Heavy Trucks (more than 3,930 k.g.): PHP 1,290.40
Motorcycles: PHP 340.40
In a nutshell, a CTPL Insurance protects the interest of the “third party,” hence the name. In the event of an accident involving your vehicle, this policy covers the financial responsibilities associated with property damage, bodily injury, permanent disablement, and/or death of the victim/s. It also provides immediate financial assistance to the victim and his/her family of up to Php 100,000.
Getting a CTPL insurance is easy and inexpensive, thanks to the Insurance Commission of the Department of Finance. They oversee and mandate CTPL insurance rates to ensure customers pay the same price across all insurance companies. To get you started, prepare the following documents.
Step 1: Choose a non-life insurance provider and buy your policy from them.
Step 2: Upon purchase, you will receive a policy with conditions together with a Confirmation of Cover or COC. Don’t forget to make copies of every document you will receive.
Step 3: Bring these documents to the LTO upon registration to prove that your vehicle has a third party insurance coverage.
True to its name, a comprehensive car insurance or “compre” is a more comprehensive type of policy compared to CTPL. It’s not mandatory, but it is highly recommended to buy one, especially if you use your vehicle everyday.
While a CTPL insurance protects the general public, a comprehensive car insurance protects you, your car, as well as your passengers from an extended list of road-related risks and hazards.
You might think that a CTPL insurance is enough because you’re a good driver. Even if you think you’re the most careful driver in the country, you will most likely encounter someone who’s not. And when an accident happens, a CTPL insurance can only cover you so far.
Meanwhile, a comprehensive car insurance provides financial protection to you and your car by covering car repairs and insuring you against damage, liabilities caused by collision, car theft, floods, and landslides, among many road mishaps.
In essence, buying a comprehensive car insurance in the Philippines gives you a sense of security that no matter what happens on the road, your investment will not go to waste. Without a comprehensive car insurance, you’re basically just gambling with fate.
In the event of an accident, you will shoulder all damages associated to your vehicle. You will pay for repairs, replacements, medical bills, legal services, and other fees that you’ll end up spending way more than what you would’ve saved from not buying a comprehensive policy.
Unlike CTPL insurance, there are no fixed rates when it comes to comprehensive car insurance in the Philippines. Every comprehensive policy coverage differs by price as they depend on the current state of your vehicle. Factors that may affect your policy rate are:
Fair market value refers to the estimated price of your car according to its model and series. It is a fairly accurate estimation of how much the insurance company will cover in case of vehicle damage or loss. Insurers also consider your car’s depreciation when determining the price of your insurance.
In theory, you’ll get a cheaper insurance policy if you’re insuring an older car. Most insurers apply a straight-line 10% annual depreciation to the value of cars. And of course, the overall price may vary on the types of car insurance coverage included.
A basic comprehensive car insurance caters to the common needs of vehicle owners. However, there are instances where you can add a little more coverage for your car. Here are some add-ons you may want to consider.
Since you already have a CTPL insurance, you already know the process. Just remember that you are allowed to purchase a comprehensive car insurance from a company other than your CTPL provider. Take the time to compare the rates from different providers to find the best deal possible. Once you’ve picked out your provider, prepare the following documents.
It’s basically the same process when applying for a CTPL insurance. Submit the documents to your chosen insurer, pay the premiums, and wait for your insurance policy. You will receive a digital copy through email as well as a hard copy which will arrive at the address you provided. Always keep in touch with your provider for further questions regarding your insurance.
Simply put, if you love your car and you want to keep it that way, you definitely need to get your own comprehensive car insurance. It’s the protection you, your passengers, and your vehicle needs. But if the entire process of getting a car insurance in the Philippines still confuses you, we’re here to help!
Moneymax can take you through the entire process of getting a car insurance. From choosing the right insurance to filing your insurance claim, Moneymax will assist you in every step of the way. And the best part? Our services are free! Get started by getting a free quote below.