Top 15 car insurance concerns in the Philippines—Answer

When a Filipino buys a car, it becomes mandatory to get insurance immediately. Why? It is one of the key requirements for the LTO car registration.

Also Read: Understanding 3-year LTO registration in detail

However, getting an insurance policy for your beloved car is not as simple as it sounds. While Compulsory Third-Party Liability (CTPL) insurance is a given for every car purchased in the country, it is the comprehensive insurance policy and the add-ons that confuse the car owner most.

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

In this article, our goal is to clear all your doubts concerning car insurance, thus ensuring that by the end, you have clarity on several subjects. Further, you’ll be able to learn about various aspects of car insurance, making sure that -

• You are safe from any type of car insurance scams & myths - big or small
• Able to find the top insurance provider
• Have clarity on the claim process
• Know the common policy exclusions & inclusions
• Coverage to consider in case of an accident
• Know the better choice between the dealer and the third-party insurance provider
• Know if it’s a good idea to insure an old car
• Know how to renew your car insurance and much more

So, without any delay, let’s answer the top questions Filipino car buyers often ask about car insurance.

Q1. Is it necessary to insure my car in the Philippines?

Ans. Absolutely. As per Philippine law, all vehicles are required to have Compulsory Third-Party Liability (CTPL) insurance, even before getting registered at the LTO. CTPL only takes care of third-party injuries or death and not damage to your car or injuries to the car owner and passengers.

Therefore, for broader protection (against theft, vandalism, natural disasters, and damage), we recommend car owners purchase Comprehensive Insurance.

Q2. What does comprehensive insurance cover?

Ans. Comprehensive car insurance offers a car owner a wide range of protection. It typically includes the following coverages -

• Personal Accident - Takes care of the driver’s and passengers' medical expenses if the car gets involved in an accident.
• Own Damage - Takes care of repair costs due to car accidents.
• Theft - Offers compensation when the car gets stolen.
• Acts of God - Financially covers car damages caused due to natural disasters (typhoon, earthquake, flood, etc.
• Third-Party Property Damage - This covers damages caused to another person’s property or vehicle.
• Bodily Injury Coverage - It offers financial protection against injury caused to other people in an accident.

Q3. I want to insure my car, how much will it cost?

Ans. There is no specific answer to this question, as the cost of car insurance depends upon too many factors, including car model & year, age, credit history, profession, driving record, accessories, safety features, car’s market value, location, and added coverage options.

The CTPL insurance, however, is not that pricey and ranges from PHP 650 to PHP 1500 per year, depending on the type of vehicle insured. Its affordable price tag attributes to its mandatory application and limited protection on offer.

As for comprehensive car insurance, its price ranges from PHP 10,000 to PHP 100,000+ per year. Compared to CTPL, it surely is more expensive, but that’s a small price to pay for the extensive coverage offered. The table below gives an estimation of the insurance price based on the vehicle -

Affordable car	Less than PHP 10,000 per year
Mid-tier car	PHP 10,000 to PHP 20,000 per year
Luxury car	More than PHP 100,000 per year

Q4. Can I estimate my car insurance premium beforehand?

Ans. Yes, you can get an idea of your car insurance premium beforehand. Below are the steps to do so, however, it is to be noted that this calculation will only get you an estimated figure, and for a more accurate figure, use a car insurance calculator.

How to calculate car insurance premium?

• First, compute the insured declared value (IDV), which is the value set by the insurance company and is based on the car’s age and original price.
• Determine the damage factor
• Deduct the amount of discount
• Add the cost of CTPL
• If there’s any additional fee, add it as well

Also Read: Here’s how to easily obtain car insurance quotes online

Q5. How can I find good car insurance with a low premium?

Ans. To save money on your car insurance policy, we’d recommend doing the following -

• Boost your credit score; this will reward you with good deals and discounts from the insurance provider.
• Be a careful and considerate driver, some insurers offer discounts to applicants with no claims for an entire year.
• Buy two or more policies (home, life, car insurance) from the same insurance company, as it may make you eligible for discounts.
• Consider your policy inclusions smartly, as the more inclusions, the higher the insurance rate. Opt out of certain inclusions that you think you don’t need; for instance, if you have an old car, drop auxiliary inclusions, and drop riot and theft coverage if you live in a peaceful and safe community.
• If you are buying a car and are considering future expenses, it is good to know that an expensive car leads to pricier insurance and vice versa.
• Opt for a higher deductible; this will reduce your insurance cost (note, this will translate into you paying more when filing a claim).
• If possible, pay the year’s car insurance in full, as some insurance providers offer a discount in such scenarios.
• A good driving record can earn you a reduced premium; also, a loyal applicant can leverage his/her relationship with the insurer and crack a good deal.

Also Read: How to claim CTPL Insurance? Here’s what you need to know

Q6. How do I file a car insurance claim in case of an accident?

Ans. When involved in an accident, you should take the following course of action to file the insurance claim -

• First and foremost, ensure everyone's safety, check everyone for injuries, and move to a safe location.
• Call the police and your insurance provider.
• In the meantime, try to gather evidence, take pictures of the accident location, and the vehicles involved.

Also Read: All you need to know about taking photos after a car accident in the Philippines

• Follow the claim instructions provided by the insurance provider and gather the required documents (LTO OR,  MVRR number).
• Duly accomplished insurance claim form.
• Patiently wait until the insurance provider evaluates your claim and releases payment.

Q7. What will happen to my car insurance policy, in case I decide to sell the vehicle?

Ans. Your car insurance policy depends on you. While it will not get transferred automatically, but with proper coordination and by proposing a request to transfer with the provider, the policy will get transferred to the new owner. Otherwise, it will get suspended.

Q8. Is it possible to customize my car insurance policy?

Ans. Yes. While CTPL is mandatory and comes as is, it is the comprehensive policy you can play around with and customize as per your requirement. You can add or drop coverage options like acts of god, personal accident, theft, own damage, fire, etc.

Q9. Is my car covered against damage caused by the flood?

Ans. It depends on whether you have a comprehensive car insurance policy or not. If yes, then check if it covers damage or loss from natural calamities like floods.

Q10. How long does it take to process a car insurance claim in the Philippines?

Ans. Insurance claim process usually takes somewhere from three to 30 days to process, depending on the case complexity.

Q11. Is it possible to cancel my comprehensive car insurance policy at any given time?

Ans. Absolutely, car insurance providers allow an insurer to terminate his/her policy whenever they please. However, it is advisable to always first check the terms and conditions, as you might be eligible for a full refund on the premium after cancellation.

Q12. Are the accessories and gadgets present in my car covered by my car insurance policy?

Ans. No, generally, a comprehensive car insurance policy does not cover car accessories and gadgets. However, if you want such coverage, pay a little extra for that added coverage.

Q13. Is it possible to insure a second-hand car whose OR/CR is not under my name?

Ans. Yes, you can insure a second-hand car whose OR/CR isn’t under your name. Just submit a copy of the notarized Deed of Sale to the insurance company, and the policy will get transferred to your name.

Q14. I recently purchased a pre-owned car. Can I get it insured?

Ans. Yes, car insurance providers in the Philippines offer comprehensive coverage for pre-owned cars, however, the cost and terms may vary from those of a new car.

Q15. My vehicle is being transported by a ship. Is it covered by car insurance?

Ans. A typical car insurance policy does not offer such extensive coverage. However, you can contact your insurance provider and ask for added coverage, which will come at a small additional premium.

Bottom line

Every Filipino driver needs to have a car insurance policy, as it acts as an essential safeguard. However, before finalizing the contract, it is important to assess your needs, understand the various coverage options, cost-saving strategies, and compare different lenders. Doing so will allow you to choose the right policy, which will give you the confidence to drive with confidence and complete peace of mind.

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