Insuring a pre-owned car in the Philippines: A step-by-step guide

Car insurance is a must in the Philippines. Did you know a car owner is required to get Compulsory Third-Party Liability (CTPL) insurance to get the vehicle registered at the LTO (Land Transportation Office)?

It doesn’t matter if you have a new or a pre-owned car, insurance is a tool you must have, as it will secure you from uncertain financial strains, in the event of an accident, theft, or damage. However, to receive all these benefits, a car owner needs to get Comprehensive car insurance over and above the CTPL.

Used car Need for comprehensive insurance

So, while the CTLP only provides financial protection against third-party injuries or deaths caused by the insured vehicle, comprehensive insurance protects the insured vehicle, its owner, and the passengers against roadside accidents and incidents. In addition, car insurance companies offer several add-on options, depending on the car owner’s requirements, however, they all come with a separate price tag. The table below elaborates on the most common car insurance coverages offered by most Philippine insurance providers.

Insurance coverage	Protection offered
Comprehensive coverage	It protects the car from a wide range of potential damages - from damage/theft to vandalism to acts of nature. Own damage/Theft: It covers car loss, car damage, damage/loss of declared accessories and spare parts. In case of car robberies, explosions, or fires, it covers all repair expenses. Personal accident: In case of an accident, it covers the insured individual and passengers inside the vehicle against the medical expenses. Property damage or Voluntary Third Party Liability (VTPL): Regardless of who is at fault, this coverage provides financial protection against damages caused to other’s property by the insured vehicle, in the event of an accident. Acts of God: Damages caused by extreme natural disasters (earthquakes, floods, animal attacks, and others) to the insured car are covered fully. It is quite popular in the Philippines, due to the high frequency of such events.
Collision coverage	This motor insurance covers all the damages inflicted upon the insured car, like dents and part breakage due to an accident.
Liability coverage	It covers the medical bills and repair cost of the damaged property of the other individual involved in the accident. The financial support is fixed to a certain amount which is specified in the policy.
Personal injury protection coverage	It takes care (financially) of the passengers involved in the accident.

Car insurance for used cars

We are sure that by now you are pretty convinced about getting comprehensive car insurance for your used car. Also, how it will add to your peace of mind by saving you from sudden financial liability from an accident, theft, or natural calamity.

But the question is how to secure insurance for a used car. Is it passed on by the previous owner or are you supposed to get a new one? Surprisingly both, but it also depends on the original owner’s will to pass the insurance. Let us now discuss the two used car insurance options in detail.

Used car insurance Transferring the existing policy

Out of the two options, this one is the most convenient, time-saving, and easy way to obtain car insurance for your used car. Here, all the efforts of filing the paperwork and visiting the insurance office are done by the car’s previous owner.

Key points to note about transferring car insurance -

• The original policyholder must retain the car’s insurance and cancel it for transfer to work out.
• The original owner/seller of the car will coordinate with the insurance company to transfer the policy under the buyer’s name.
• The policy can be transferred right after the vehicle’s sale is finalized.
• Once the policyholder approves the transfer, the buyer’s name will reflect on the policy and he/she will be required to pay monthly premiums.
• Once the policy is transferred, the new owner can make a claim in the event the used car needs a repair or gets involved in an accident.
• Lastly, the new policyholder needs to renew the policy, before it expires.

Used car insurance Securing a new insurance policy

Getting a new insurance policy is a tedious task compared to transferring the existing policy to your name. However, there are a few perks of securing new coverage like you have the choice of choosing.

• Preferred insurance provider
• Type of Coverage
• Add-ons

And do you know the best part, the new coverage will be as per your liking and that too at a better price!

Now, that we know the perks of getting a new insurance policy, let us check the process.

Step-by-step process of getting used car insurance

Step 1. Check the car insurance eligibility

Yes, there is an eligibility criteria when it comes to used car insurance. While new cars face no such review, a used car needs to go through a strict evaluation process by the insurance companies.

Here are a few factors on which a used car is evaluated by an insurance provider -

Age	Used vehicles that are up to 10 years of age enjoy easy insurance coverage. Any older than that and companies will charge a high premium, however it should be in good condition.
Condition	A good-conditioned used car, i.e., one without much wear and tear and running without any major time, is insurable.
History	A used car with no record of accidents or very little repair work is preferred by insurance providers.
Repair cost	Used cars with high repair costs and hard-to-find & expensive spare parts are not preferred by insurance companies.
Modification	Certain vehicle modifications are not covered under typical car insurance policies.

Step 2. Find ideal coverage

Getting the right insurance coverage is very important for a car owner and that too if the car is pre-owned. Why? Well, that’s because used cars are at higher risk of breaking down, getting stolen, and inheriting modifications. Here are a few car insurance coverages to consider -

• Comprehensive coverage: Take it if your car is less than 10 years old.
• Roadside assistance: It will come in handy in situations like road accidents, car stalling, and engine overheating.
• Vehicle loss or theft: Essential if the car misses an anti-theft device.

Step 3. Get quotes, compare, & finalize

After knowing your insurance coverage requirements, it is now time to shortlist the insurance providers meeting your requirements. Once that is done, gather quotations from each provider and compare them side by side. Choose the one that best suits your budget and at the same time offers optimum coverage.

Note, that insurance quotes can be sourced by contacting each provider, either via call or website. To save time you can also use online insurance comparison platforms like Carmudi.

Step 4. Prepare documents & submit the application

Once you are done deciding on the insurance provider, it is time to inquire about the documents and information needed for submission of the application form. Basic requirements include a used car and its owner’s details.

Key points to note -

• Car insurance policy forms and required documents can be submitted via email or personally by visiting the office.
• After submission, an officer from the insurance company will soon visit to inspect the used car and its condition.

Step 5. Get your policy

If everything goes as planned, you will soon receive a new car insurance policy for your car. A soft copy will be sent in your mail, while a hard copy will be delivered to your address.

Step 6: Pay premium on time

Now that you are a used car insurance policyholder, you must pay the premium on time without fail, else your policy will be canceled and you won’t be able to enjoy any benefits.

Bonus tip: Top car insurance companies in the Philippines to consider

If you are planning to get a new car insurance policy for your second-hand car, here are some top auto insurance providers with their basic details to help you compare and decide.

 

Car insurance providers	Coverage	Top benefits
BPI MS Motor Insurance	Comprehensive and compulsory third-party liability	Hassel-free payments via various partners & Branches
AXA Philippines Car Insurance	Own damage, theft, personal accident, acts of nature, property damage	Easy claim, Free and easy access to 24/7 emergency services, VIP services for members
Cibeles Motor Car Insurance	Comprehensive, CTPL, voluntary third-party liability, and more	Flexible and responsive claims, accreditation from all major banks
FPG Motor Insurance	Own damage, theft, acts of nature, auto personal accident, SRCC	Easy claim via FPG’s website
MAA General Assurance Phils. Inc. Insurance	CTPL, Comprehensive insurance, loss or damage, excess bodily injury, third-party property damage	24-hour roadside assistance
Malayan Insurance AutoMaster	CTPL, loss and own damage, acts of nature, loss of use, accessories protection, and more	24-hour roadside assistance
OONA Car Insurance	Wide range of packages based on customers’ preferred coverage	Roadside emergency assistance and security glass etching
Pioneer Motor Insurance	CTPL, own damage and theft, voluntary third-party liability for property damage, excess voluntary third-party liability for bodily injury/death,	Offers several add-ons under comprehensive coverage

Bottom line

Be it a used or new car, do not skip car insurance - both CTPL and comprehensive insurance. The additional coverage of comprehensive insurance will relieve you from financial liability in case of a car breakdown, accident, or theft. We’d just suggest you carefully evaluate the coverage options as per your driving needs and requirements.

Also Read: Car insurance sorted? Now follow these essential steps