Why comprehensive insurance is vital for car owners in the Philippines

Like anywhere else, owning a car in the Philippines requires proper insurance. It's not just a good idea; it's the law. Driving without valid insurance can lead to hefty fines and penalties, particularly in cases of accidents or traffic violations. While most people understand the significance of insuring their cars, deciding between Third Party Liability (TPL) insurance and comprehensive insurance can be confusing. TPL insurance is the minimum legal requirement, whereas comprehensive insurance offers broader coverage for damages and theft, safeguards your car, and offers financial security in unexpected situations. Comprehensive coverage provides significant advantages for a relatively small premium increase, making it a wise investment for every car owner in the Philippines; let's take a deep dive into understanding why.

Understanding comprehensive car insurance

Think of comprehensive insurance as a protective shield that protects you and your car from unexpected mishaps. It goes beyond the mandatory Third-Party Liability (TPL) insurance, which only covers injuries and damage to other people and property. While TPL offers a fundamental level of security, it leaves considerable financial vulnerabilities for car owners. Conversely, comprehensive insurance acts as a personal guardian for your car, safeguarding it against a broader array of risks.

Benefits of having a comprehensive shield

Collision coverage: Comprehensive coverage takes care of repairs to your car, even if you're the ‘at-fault’ party in the accident. This includes repairs to dents, scratches, broken windshields, and even more extensive damage caused by collisions with other vehicles or stationary objects.

Theft and carjacking protection: Unfortunately, car thefts are on the rise in the Philippines and often leave car owners with a deep hole in their pocket. Comprehensive insurance acts as your financial shield, reimbursing you for the car's current market value in case it's stolen and not recovered. This ensures you're not left with a significant financial loss on top of the emotional distress of having your car stolen. Additionally, if your car is recovered but damaged during the theft attempt, comprehensive insurance covers the repair costs, getting your car back on the road promptly.

Act of god savior: The Philippines is an archipelago nation, prone to typhoons, floods, and earthquakes. These natural disasters can wreak havoc on your car, leaving it submerged, battered, or even completely destroyed. Comprehensive insurance comes to the rescue, covering repairs or even replacing your car if these calamities damage it.

Fire and explosion: Accidental fires or explosions can turn your car into a pile of scrap metal in minutes. Comprehensive car insurance has your back, reimbursing you for the car's value in case of a complete loss due to fire or explosion or covering repair costs if the car is salvageable.

Riot and strike shield: Protests and demonstrations can sometimes get rowdy. Comprehensive car insurance can cover the repairs if your car gets caught in the crossfire and suffers damage from vandalism or flying objects. This ensures your car doesn't become an unexpected casualty of civil unrest, protecting your investment.

Malicious acts or vandalism: Did someone with a grudge decided to take it out on your car, leaving unsightly scratches on the paintwork? Comprehensive insurance can ease the pain by covering the repair costs. This financial protection ensures minor acts of vandalism don't turn into major financial headaches.

Why is comprehensive car insurance better than TPL?

While TPL is mandatory and offers basic protection, it leaves you exposed financially in many situations. Here's why comprehensive insurance is better than the basic TPL cover:

Complete peace of mind: Knowing your car is covered against a wider range of threats, from fender benders to natural disasters, gives you invaluable peace of mind while driving. You can focus on navigating the busy streets of Manila or the scenic highways of the countryside, confident that your car is protected.

Financial cushion against the unexpected: Events like accidents, theft, natural disasters, etc. can be financially devastating. Comprehensive car insurance absorbs the financial blow, preventing you from digging deep into your savings or taking on debt to repair or replace your car.

Increased resale value: A car with comprehensive insurance is generally more attractive to potential buyers. It signifies to them that you've taken good care of the vehicle and haven't skimped on its protection, translating to a higher resale value when you decide to sell your car.

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

How much does comprehensive insurance cost?

On average, the cost of comprehensive car insurance typically ranges from ₱15,000 to ₱20,000 per year, with premiums sometimes reaching up to ₱50,000 per year.Various factors influence the cost of comprehensive insurance, and it is crucial to balance coverage and affordability. Here is a breakdown of the main factors that impact the cost:

Car make and model: Luxury cars, high-performance vehicles, and even car models with a higher theft rate typically have higher premiums because they are statistically more expensive to repair or replace.

Age and condition of the car: Older cars with a higher risk of breakdowns due to wear and tear might cost more to insure than newer vehicles. Additionally, a car with a history of accidents or previous damage claims can also lead to a higher premium.

Your driving history: Your driving history: A clean driving record with no accidents or traffic violations lowers insurance companies' premiums. Conversely, a history of accidents or violations will likely result in a higher premium to reflect your increased risk as a driver.

Location: Cars driven in high-crime areas or areas prone to natural disasters might have slightly higher premiums. This is because the likelihood of theft, vandalism, or damage from typhoons, floods, or earthquakes is statistically higher in these areas.

Coverage details: The extent of your coverage also affects the premium. You can customize your policy by choosing a higher or lower deductible (the amount you pay upfront before the insurance kicks in). A higher deductible typically means a lower premium, but it's important to choose an amount you can comfortably afford in case of a claim. Additionally, you can opt for add-on coverages like acts of terrorism or personal accident insurance for extra protection, which will also influence the overall cost of your policy.

Factors to consider when buying a comprehensive car insurance

When shopping for comprehensive car insurance in the Philippines, keep these points in mind to ensure you get the best coverage for your needs in your budget:

Compare quotes: Don't settle for the first offer! Get quotes from various reputable insurance companies in the Philippines, allowing you to compare coverage options and pricing to find the best deal. To find out how much it will cost you to insure your vehicle, compare affordable car insurance quotes for free here at Carmudi.

Read the fine print: This may not be the most exciting part of the process, but it's essential. Understand the terms and conditions of the policy, especially exclusions and limitations on coverage. This will help you avoid any surprises down the line if you need to file a claim.

Deductible: As mentioned earlier, a deductible is the amount you pay upfront before the insurance company starts covering the repair or replacement costs. Choosing a higher deductible can lower your premium, but make sure it's an amount you can comfortably afford in case of a claim.

Add-on coverages: Consider adding optional coverages to your comprehensive insurance policy for extra protection. Some popular add-ons in the Philippines include acts of terrorism coverage, which provides financial protection in case your car is damaged during a terrorist attack. A personal accident insurance can also be a valuable addition, as it provides medical coverage for you and your passengers in case of an accident.

Agent vs online: Traditionally, people of the Philippines relied on insurance agents to guide them through the process. However, today, people have easy access to the internet where they can compare insurance packages online and choose for themselves. Insurance agents can offer personalized advice and guidance, but they might have limited coverage options depending on the companies they represent. Online platforms, on the other hand, allow you to compare quotes from a wider range of insurers, but you might miss out on the personalized touch and expert advice of an agent. Choose wisely!

Bottom Line 
In the Philippines, where roads can be unpredictable and natural disasters are a constant threat, comprehensive car insurance is more than just an option; it's a wise investment. So, get out there, compare quotes, choose the right coverage for your needs, and drive with confidence, knowing that your car and your wallet, are protected.

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