Car insurance made easy: Tips for new drivers in the Philippines

Navigating the world of car insurance can be a bit overwhelming, especially for new drivers in the Philippines. Whether you have just purchased your first car or just learned to drive, it is crucial to understand car insurance and how to choose the right policy.

In the Philippines, car insurance is not just a legal requirement but it also offers a financial safety net that protects the driver from unforeseen expenses in the event of an accident, theft, or natural disaster. With so many options and complex terms, it often becomes difficult for an applicant to find the best coverage.

Also Read: Important insurance terms a car buyer should know

To make things easier, here is a guide to simplifying car insurance wherein we have provided practical tips to help new drivers make an informed decision. But first, let us understand the basics of car insurance in the Philippines.

Basics of car insurance

Before diving into the tips, it's important to understand the basics of car insurance in the Philippines. Let us begin with the meaning -

Car insurance is a contract between you and an insurance company that provides financial protection against physical damage or bodily injury resulting from traffic collisions and other vehicle-related incidents.

Moving on, there are two main types of car insurance in the Philippines: Compulsory Third-Party Liability (CTPL) insurance and Comprehensive insurance.

Compulsory Third-Party Liability (CTPL) Insurance: This is the minimum insurance required by law in the Philippines. CTPL covers the liability of the car owner for injuries or death of third parties (people outside the vehicle) in an accident.

Comprehensive Insurance: This is optional insurance that covers a broader range of incidents, including damage to your car, theft, and even natural disasters. It also often includes coverage for third-party liability beyond what CTPL offers.

Also Read: Compulsory Third-Party Liability Insurance (CTPL) vs. Comprehensive Insurance: What's best for you?

Importance of car insurance for new drivers

Car insurance is very important for new drivers. Why? Because an inexperienced driver on the road is more prone to make mistakes that could lead to accidents. Here car insurance provides a safety net that helps mitigate the financial impact of such incidents. It also gives the driver peace of mind, knowing that in case of an unexpected event, he/she is protected.

Note, that in the Philippines, driving without at least the minimum required CTPL insurance can result in hefty fines and penalties, making it essential for all drivers to be insured.

Tips for choosing the right car insurance for new drivers

#1 Assess your coverage needs

When choosing car insurance, a new driver should first consider his/her specific needs. For new drivers, it's often recommended to opt for comprehensive insurance, which provides broader coverage. However, if you're on a tight budget, you might start with CTPL and gradually upgrade your coverage as you gain more driving experience and financial stability.

#2 Compare different insurance providers

In the Philippines, numerous insurance companies offer car insurance policies. Take the time to compare different providers, considering factors like coverage options, premiums, customer service, and claims process. Use online comparison tools like Carmudi to easily evaluate multiple options.

Also Read: How to select a good car insurance provider in the Philippines: Key tips & considerations

#3 Clearly understand policy inclusion & exclusion

One of the most common mistakes new drivers make is not fully understanding what their policy covers. Before purchasing insurance, carefully read the policy’s terms and conditions. Also, pay special attention to inclusions (what is covered) and exclusions (what is not covered) to avoid surprises when filing a claim.

Also Read: Car Insurance: Common inclusions and exclusions you need to know

#4 Consider deductible amount

First, let us understand what is deductible. “A deductible is the amount you pay out of pocket before your insurance coverage kicks in.”
Now, choosing a higher deductible can lower your premium, but it also means the applicant pays more in the event of a claim. For new drivers, a lower deductible might be more beneficial, as it reduces your financial burden in case of an accident.

#5 Check out discounts and special offers

Many insurance companies in the Philippines offer discounts for various reasons, such as installing safety devices in your car or having a good driving record. As a new driver, inquire about any discounts you may be eligible for to reduce your premium.

#6 Evaluate the claim process

The simplicity of the claim process is a crucial factor when choosing an insurance provider. Try looking for insurers known for their efficient and hassle-free claims process. This can make a significant difference when you're in a stressful situation and must file a claim.

#7 Review the insurer’s reputation

When choosing a provider, a driver should research the insurance company's reputation before making a decision. Check online reviews, ask for recommendations from friends or family, and consider the company's history in the industry. A reputable company is more likely to promptly provide reliable service and honor claims.

#8 Take advantage of no-claims bonus

What is a No-Claim bonus? “A No-Claims Bonus (NCB) is a discount given to drivers who do not file any claims during a policy year.’
As a new driver, aim to drive safely and avoid filing small claims to build up your NCB, which can significantly reduce your premium over time.

Also Read: Driving habits that insurance companies prefer

Common car insurance terms a new driver must know

It is given that car insurance policies are filled with terms that might be confusing for new drivers. Here’s a quick guide to some common terms:

Premium: The amount you pay for your insurance policy.
Deductible: The amount you pay out of pocket before your insurance covers the rest.
Exclusions: Specific situations or items that are not covered by your insurance policy.
Policy terms: The duration of your insurance policy, typically one year.
Coverage limit: The maximum amount your insurance will pay for a covered loss.

Common mistakes new drivers must avoid when buying car insurance

#1 Choosing the cheapest policy

While it might be tempting to choose the cheapest policy, it's important to ensure that the coverage meets your needs. Cheap policies often come with high deductibles and limited coverage, which might not provide adequate protection.

#2 Not reading the fine print

Always, always read the fine print of the policy. Many new drivers make the mistake of overlooking details, which can lead to issues when filing a claim. Also, make sure you understand all the policy terms and conditions before signing the contract. Never shy away from asking questions, as it will only lead to confusion and problems in the latter stages.

#3 Ignoring claim process

Some new drivers focus solely on the cost of the policy and overlook the importance of a smooth claims process. As mentioned above, always choose an insurer known for a straightforward and supportive claims process to avoid frustration later on.

Basic car insurance claim filing process for a new driver

Understanding the process of filing a car insurance claim is crucial, especially for new drivers who might find the experience daunting. Here’s a step-by-step guide to help you through the process:

Step 1: Report the incident immediately to the insurance company and the authorities

Step 2: Gather all the necessary documents like a copy of your insurance policy, filled-out claim form, police report, photos of the damage, driver's license and vehicle registration

Step 3: Submit the claim form and documents

Step 4: Wait for the insurance adjuster’s assessment of the damage, depending on which he/she will determine the amount that will be covered by the policy

Step 5: Once the claim is approved, get the vehicle repaired at an accredited repair shop

Also Read: A step-by-step guide on how to claim car insurance in the Philippines

Bottom line

Car insurance is a crucial part of responsible car ownership, particularly for new drivers in the Philippines. Not only does it provide essential financial protection and peace of mind, but it ensures that you're covered in the event of an accident or theft. Just by understanding insurance needs, comparing providers, and choosing the right coverage, a new driver can make informed decisions that protect both him and the vehicle. Also, after purchasing the policy do remember to review the policy regularly and adjust it as per your changing needs.

Go, find yourself the right insurance provider with the perfect coverage.

Also Read: Why every Filipino driver needs car insurance