The Beginner’s Guide to Car Insurance in the Philippines

Reading time: 6 minutes

February 6, 2019

Owning a vehicle entails many responsibilities. At the onset, you need to accomplish basic requirements such as vehicle registration and car insurance coverage. The latter, however, tends to be more complex than the former. Other than determining the coverage your vehicle really needs, you also need to look for an insurance company that offers the best deals.

If you think car insurance is a burden, think again. It’s the protection you, your vehicle, and your passenger needs. Learn everything about car insurance in the Philippines by reading—and sharing—this thorough guide.

Why is it Important to Have Car Insurance?

Accidents can happen to anyone, even to the most careful driver on the road. While car insurance cannot prevent accidents from happening, it can protect you and your vehicle when unfortunate incidents occur.

Car insurance provides financial protection by covering car repairs and insuring you against damage, liabilities caused by collision, and car theft, among many others.

Without car insurance, you will be financially responsible of all damages associated to your vehicle. This can be extremely costly and difficult to pay, especially if you aren’t financially prepared.

How Much is Car Insurance in the Philippines?

There is no fixed price for car insurance in the Philippines. Every car insurance coverage differs by price as they depend on the current state of your vehicle. Factors that may affect your policy rate are:

  • Model of your car
  • Make of your car
  • Your car’s variant
  • Your car usage

Another important thing to note when determining the price of car insurance is Fair Market Value. FMV is a value computed according to the vehicle’s model and series. It is a fairly accurate reflection of the price that the insurance company will cover in case of vehicle damage or loss.

Insurers also consider your car’s depreciation when providing a rate. Your car loses value every time you use it; it wears out just like any belonging thus affecting its overall worth. Most insurers apply a straight-line 10% annual depreciation to the value of cars. However, this calculation may vary on a case by case basis.

Different Types of Car Insurance

There are two types of car insurance in the Philippines: Compulsory Third Party Liability (CTPL) and Comprehensive Car Insurance or “Compre.” What are their main differences and which type do you need? Here’s a quick rundown.

Compulsory Third Party Liability

CTPL insurance is the most basic and least expensive car insurance in the Philippines. It is a government-mandated insurance policy, which covers both private and public vehicles. Before registering your vehicle with the Land Transportation Office (LTO), you need to secure a CTPL insurance first.

How Much Is CTPL insurance?

CTPL rates differ by length of coverage and type of vehicle. Below are the rates mandated by the Department of Finance’s Insurance Commission.

For one-year coverage:

For three-year coverage:

What Does CTPL Insurance Cover?

CTPL insurance covers a policyholder from financial responsibilities brought by injuring or killing a person. It covers the expenses associated to property damage, bodily injury, permanent disablement, and/or death of the person involved in an accident. Remember that you can only claim a CTPL insurance coverage if the injury or death of the third party was due to the operation of your vehicle.

For a more detailed list of CTPL insurance coverages, click here.

How Can I Get a CTPL Insurance?

Getting a CTPL insurance is easy. In fact, all you have to do is choose a non-life insurance provider and buy your policy from them. The Insurance Commission of the Department of Finance mandates CTPL insurance rates so you can ensure the same CTPL rate across all insurance companies.

Upon purchase of a CTPL insurance, you will receive a policy with conditions together with a Confirmation of Cover or COC. Bring these documents to the LTO upon registration to prove that your vehicle has a third party insurance coverage.

Comprehensive Car Insurance

Comprehensive Car Insurance or “Compre” is much different compared to CTPL. Other than providing more coverage, the government does not require this type of car insurance.

Getting a Comprehensive Car Insurance is a smart move, especially if you use your vehicle every day. It secures you, your car, as well as your passengers from risks you don’t have direct control of. Apart from road-related incidents, a Comprehensive Car Insurance can also protect you from natural disasters such as flood and earthquake.

Common Coverage of Comprehensive Car Insurance

Below are the common coverage that may be part of a comprehensive car insurance in the Philippines.

Own Damage/Theft

Own Damage/Theft is the most common coverage across car insurance companies in the Philippines. It covers car damage, car loss, and damage/loss of declared accessories and spare parts due to instances like car robbery, vandalism, and fire or external explosion.

Property Damage or Voluntary Third Party Liability (VTPL)

Voluntary Third Party Liability or VTPL mainly covers damages caused by your vehicle to third party properties. For example, if you get into an accident and damage someone else’s car, your insurance company will cover all property damages associated to that incident.

Personal Accident

Personal Accident or Auto PA usually comes as a free add-on upon purchase of a comprehensive car insurance. This kind of coverage provides financial aid to you and your passengers in the event of injury, disablement, or death caused by a vehicular accident.

Acts of Nature

Also known as Acts of God, Acts of Nature became extremely relevant after Typhoon Ondoy flooded Metro Manila and destroyed thousands of cars. Many insurance companies offer this coverage due to the extreme weather conditions in the country. Acts of Nature protects vehicles from natural disasters such as earthquake and flood, and even animal contact.

Coverage Add-Ons

A basic comprehensive car insurance serves the common needs of vehicle owners. However, there are instances that require a little more coverage for your car. Here are some add-ons to consider.

Legal Assistance

If you are involved in a legal case caused by a vehicular accident, this kind of insurance coverage can aid you financially by paying for hearings and/or legal consultations.  Legal assistance allows you to settle legal issues in a more cost-effective way.

Roadside Assistance

Do you wish to receive immediate assistance when your car breaks down on the road? If yes, consider adding this coverage to your policy. Roadside Assistance covers various vehicle services, including towing services, roadside repairs, and fuel deliveries.

Loss of Use

If you can’t use your car due to damage, Loss of Use will reimburse any transportation expenses incurred during your vehicle’s repair period. Some insurance companies also offer temporary transport services in events like this.

Things to Remember When Buying Comprehensive Car Insurance

  • Know the term and expiry of the policy. Take note of the term and expiry date of your policy to avoid additional costs from your insurance company.
  • Don’t skip the fine print. Before signing, read the documents provided to you. It’s important to know about the inclusions and exclusions as well as the clauses and terms that will help you during claims and car insurance renewal.
  • Compare providers. Don’t settle with a single insurance company; other companies can provide you a better and cheaper deal. Read about car insurance companies in the Philippines and let help you compare.

When looking for a comprehensive car insurance, think about your vehicle, your lifestyle, and your budget. While more coverage means more security, it also means more expenses. Be smart and only get the policy you need.

How Do I Apply for Car Insurance?

If you have a CTPL, it means you’re already associated with a provider. However, remember that you can still purchase a comprehensive car insurance from a different company. When you already know which insurer to work with, prepare the following:

  • Original vehicle receipt
  • Certificate of Registration of your vehicle
  • Your driver’s license
  • Another valid government ID

Some providers may require extra copies of your original receipt and COR so prepare these, too. Once you’ve submitted the documents and have already paid your premiums, you will then receive your policy. You will receive a digital copy through e-mail as well as a hard copy, which may arrive at the address you provided. Always keep in touch with your provider for further questions regarding your insurance.

Car Insurance Providers in the Philippines

Below are some of the leading car insurers in the Philippines.

AFP General Insurance

AFP General Insurance is the primary non-life insurer provider of the Armed Forces of the Philippines. Established in 1979, AFPGEN has extended their services to private sectors providing motorcar, marine, and aviation insurance coverage.

FPG Insurance

Formerly known as Federal Phoenix Assurance Corporation, FPG Insurance provides a comprehensive range of general insurance products for businesses and individuals in the Asia Pacific region. The company is a subsidiary of the Zuellig Group of Companies.

Oriental Assurance Corporation

Apart from motorcar insurance, Oriental Assurance Corporation also provides general insurance products such as fire, marine, aviation, engineering, and electronic equipment solutions. The company promises unique insurance needs at a reasonable price.

QBE Seaboard Insurance

Despite being new in the industry, QBE Seaboard is one of the world’s top 20 general insurance companies. Headquartered in Sydney, Australia, the company provides insurance products to businesses and individuals worldwide.

SGI Philippines

SGI Philippines is one of the largest insurance companies in the Philippines. They aim to serve different sectors with quality insurance products such as motor, health, and marine. Their latest product—Micro Insurance—services the risk and protection needs of the masses at an affordable price.

Standard Insurance

Standard Insurance offers a wide range of property and general insurance products for individuals, small to medium enterprises, and local and global corporations. They are one of the leading motorcar insurance companies in the Philippines with more than 52 branches nationwide.

Don’t discount the importance of car insurance. It’s the protection you, your passengers, and your vehicle needs. A small investment can go a long way, especially when faced with uncontrollable incidents. Compare providers and work with an insurer that can provide your needs even when on a budget.