No car insurance? Here’s what all wrong can happen in the Philippines

Not having car insurance in the Philippines is no joke. Why? You say. It could lead to several severe consequences. It is like a risky gamble that could cost more than you realize.

Sure, skipping out on insurance premiums may seem like an easy way to save money, but have you ever thought about the consequences if you’re involved in an accident? Imagine, you’re driving through busy Manila traffic, and suddenly—boom—you hit another vehicle or, worse, a pedestrian. Without insurance, you’re suddenly staring at a mountain of costs: vehicle repairs, medical bills, or legal fees. And that’s just scratching the surface.

Car insurance in the Philippines

In the Philippines, it is mandatory for a car owner to at least have Compulsory Third-Party Liability (CTPL) insurance. However, many drivers even dare to skip this basic coverage. Reason? CTPL only protects claims if someone else is injured, not if your car gets damaged or stolen. So, if something goes wrong with you or your car, you are on your own for any cost related to hospital and repair bills.

And therefore many opt for comprehensive insurance that provides broader coverage, including damages to your vehicle, theft, and natural disasters. Further, given the country’s high accident rates and frequent natural calamities, having car insurance can save you from costly repairs, medical bills, and legal consequences.

Cost of not having insurance

While insurance premiums can seem like an added expense, the cost of not having insurance is much greater. A car owner may save on monthly premiums, but one major accident can wipe out years of savings. Moreover, if a car is involved in multiple accidents, each event will accumulate expenses, further increasing the financial burden.

Consequences of not having car insurance

In the Philippines, having no car insurance can lead to severe financial, legal, and personal consequences. Here's what you need to know:

Legal penalties

As mentioned, driving without insurance, particularly without the mandatory Compulsory Third-Party Liability (CTPL) insurance, is illegal. Further, CTPL is required by the Land Transportation Office (LTO) for vehicle registration. Without CTPL, you risk paying hefty fines and penalties, as well as legal complications.

Also, if you cause an accident and lack insurance, legal action may follow. You could face charges for reckless driving, property damage, or worse if the accident involves injury or loss of life. Such charges can escalate in cases of reckless driving, which may lead to criminal prosecution.

Remember, legal problems are not only stressful but also time-consuming and costly to resolve.

Financial burdens

Accidents, whether minor or serious, result in significant financial obligations when you don’t have insurance. Without coverage, you'll be responsible for all the costs involved, from repairing your vehicle to compensating third parties. Some common expenses include -

Out-of-pocket repairs: Car repairs are very costly and without insurance, all go out of the owner's pocket. Be it a minor dent or major damage, the repair cost goes into tens of thousands of pesos.

Medical expenses: In case of an accident (where you are at fault), it is obvious that you would need to cover all the medical expenses (including hospital bills, treatments, and long-term rehabilitation costs) of the injured parties.

Property damage: If the accident leads to damage to property (like public infrastructure or someone else's vehicles), you’d be liable for repairs.

Lack of protection

With comprehensive car insurance by your side, you not only get protection for third parties but also for your vehicle. Without comprehensive car insurance, you would be exposed to several risks and financial burdens including -

No coverage for damaged vehicle: Repairing a car involved in an accident is quite expensive. Without comprehensive insurance the entire cost will fall over you, thus leaving a significant hole in your savings.

No protection against theft and vandalism: Another risk you’ll face without insurance is zero protection against car theft and vandalism. As per reports, in 2023, vehicle theft in the Philippines remained a major problem making insurance even more necessary to shoulder the financial loss.

No protection against natural disasters: The Philippines is highly susceptible to natural calamities like typhoons, floods, and earthquakes. Without insurance that includes "Acts of God" coverage, damage caused by such events will not be compensated.

Livelihood/business loss

In case you rely on your car for livelihood (making deliveries or ride-sharing), an accident could mean a loss of income. With no insurance to cover repairs, your vehicle may be out of the job for weeks or even months, thus affecting your earnings.

Stress and inconvenience

One of the immediate consequences of not having car insurance is stress. Handling the aftermath of an accident, from negotiating with the other party to covering costs, adds unnecessary pressure. Without insurance, the entire responsibility falls on your shoulders.

Severe consequences if you hit a pedestrian

The legal and financial repercussions of hitting a pedestrian are severe, if you do not have insurance. In the Philippines, if a car and a pedestrian collides, the driver would be held liable even if the pedestrian is at fault. Without insurance, the driver needs to take care of medical expenses and even face legal consequences. On the other hand, if you are at fault but have insurance, say comprehensive insurance it can take care of these claims and mitigate the financial and legal impact.

Note, that whenever such an incident happens, it is important to immediately assist the injured by calling for medical help and reporting the incident to the authorities. However, if death occurs, the family of the victim can press charges and demand compensation, which could amount to millions of pesos.

Miss out on additional benefits

Car insurance in the Philippines provides more than just basic third-party liability coverage. Here are some of the additional benefits, depending on the policy chosen -

• Comprehensive coverage offers protection against damage to your own vehicle, theft, and accidents.
• Acts of Nature coverage offers protection from natural calamities like floods and earthquakes, which are common in the Philippines.
• Personal accident insurance covers medical expenses and death benefits for the driver and passengers.
• Property damage coverage pays for damage caused to another person's property.

How to choose the right car insurance?

Now that you are familiar with the consequences of not having car insurance, it is time to understand how to select a coverage that’s right for you. Selecting the right car insurance involves considering your specific needs, risks, and budget.

In addition to CTPL, comprehensive insurance is recommended for additional protection, but policies under it vary in cost depending on the coverage and insurance provider. Some of the major factors that will influence your decision include - the car’s value, the location where you live, its intended use, etc.

Here are some tips to consider when opting for car insurance -

• Ask the risk: If you live in an area prone to flooding or high crime rates, prioritize coverage for natural disasters or theft.
• Compare insurance providers: In order to get the best deal, use online platforms to compare different policies.
• Consider customization: Some insurers offer customizable plans where you can pick and choose what to include, such as roadside assistance or rental reimbursement.

Final thoughts

In the Philippines, driving without car insurance exposes a driver to substantial financial, legal, and emotional challenges. While you might save money on premiums in the short term, the cost of an accident—whether involving property damage, injury, or worse—can far outweigh these savings. While CTPL is mandatory, comprehensive car insurance provides vital protection against unpredictable events, offering peace of mind and legal compliance.

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