• Best Car Insurance Plans Philippines

    What is Car Insurance and why do you need it?

    No matter how many years of driving experience you have or how careful you are behind the wheel, accidents happen every day. Purchasing a good car insurance will help manage the risk that comes with owning a car. Car or auto insurance is a policy that protects you from financial loss due to any car related damage. Basically it is an agreement that you share with an insurance company that ensures coverage for losses as defined by the policy. The kind of coverage that you get will depend on the kind of policy that you have chosen. You could save thousands on repairs and hospital bills with a good car insurance in place. Doesn’t that sound like a recipe for peace of mind on the road?

    Car Insurance in the Philippines

    As a car owner on the chaotic roads of Philippines, a responsible step to take is protecting yourself financially from damages to your car. Moreover, in Philippines, the law requires you as a vehicle owner to purchase a Compulsory Third Party Liability (CTPL) insurance policy. CTPL ensures that compensation is provided to the third party in the event of an accident. You could also purchase a Comprehensive car insurance to ensure extra protection, but this isn’t required by law.

    Types of Car Insurance

    Along with deciding which kind of car you want, you should also reach a decision as to what kind of car insurance you want. This should be carefully thought out as various kinds of auto insurance provides different benefits. Some of them are listed below:

    1. Liability Insurance
    2. Liability Insurance, according to Philippine’s law, is a compulsory policy that you must purchase as a car owner in Philippines. In the event of an accident that you have caused in your covered car, the policy will take care of all the financial damages (damage to property as well as medical bills of injured people in the accident). However, this is not an unlimited amount. Your policy will specify the maximum amount that will be covered.

    3. Comprehensive Coverage
    4. Damage to your car doesn’t just happen on the road, they can happen anywhere. A parked car is also at risk. For example, if a child scrapes his cycle on your car door while its parked, you will still have to bare the financial burden, unless you are covered. There are a million things that put your precious car at risk no matter where it is. With the Comprehensive Coverage, you got all the damage in such situations covered, and not just damages in auto accidents. Chances are that your lender will expect you to buy this kind of insurance if you are still paying off your car.

    5. Collision Coverage
    6. This kind of insurance will cover the damage that is most obviously expected of an auto insurance policy. The insurance company will pay for repair of your car if your covered car is in an accident. In case there is extreme damage, and the cost to repairing it is more than the value of the car (totalled), the insurance company will pay the same amount as the value of the car.

    7. Personal Injury Protection
    8. One type of expense that we don’t necessarily think about is the hospital charge of the people when involved in accidents. The Personal Injury Protection covers the hospital bills of everyone in the accident; drivers as well as passengers.

    9. Rental Car Insurance
    10. For many of us travelers, renting cars is a frequent affair. The Rental Car Insurance is designed keeping these renters in mind as it covers the rental cars. However, this type of insurance can be avoided unless you see yourself renting cars very often.

    Some Common Car Insurance Coverage

    When you hear ‘Comprehensive Car Insurance’, you may expect it to be just that right? ‘Comprehensive’. Unfortunately this is not the case in most insurance companies. Different companies have different benefits when it comes to comprehensive coverage. You have to read the small print of each policy to figure out what companies may include under the title of ‘Comprehensive’, and thus what are the damages that will be covered. Although they may vary in their additional benefits and coverages, the basic coverage that are present in most companies remains the same. Please note that they may carry separate premiums and limit amounts.

    Here are some of the common comprehensive coverage offers that are available in the Philippines:

    1. Own Damage / Theft
    2. This feature is found most frequently in comprehensive car insurance covers. Every time you make a car insurance claim an amount will be deducted. Any financial expense caused by damage to the car, loss of the car as well as damage/loss to accessories/spare parts (that have been declared) will be covered. The following are the instances where such damage will be covered:

      • Stealth of the car: In the event of the covered car being stolen, the insurance company will pay up to the Fair Market Value of the car. This value is decided upon by the insurance company by accounting in the value of depreciation.
      • Vandalism, theft of the car’s parts, or any related criminal acts: There are instances when the car may be vandalized and parts of it stolen. This coverage is meant for such instances and other related acts. The Fair Market Value of the lost parts is calculated in such a situation. The insured will have to bear the full cost of replacing the part if the value of the replacement is not more than the value of the deductible.
      • Damages while driving: This covers the most obvious kind of damage to the car; damage caused while driving the car. This can be anything from your car hitting a pole, falling in a ditch or hitting another car. As long as the damage is caused while driving normally and legally, this feature will have you covered.
      • Fire, or external explosion: If the car catches fire, either from an external source or by self-ignition, the expenses will be completely covered.
      • Damage while in transit: If your car is being transported by rail, lift etc., and happens to be damaged in the process, this feature will take care of the expenses.

      What this does not cover:

      • If any items have been damaged/stolen from inside the car, it will not be covered.
      • Natural disasters, rare accidents like if a tree falls on the car, earth cracks open etc. will not be covered.
    3. Voluntary Third Party Liability (VTPL) or Excess Bodily Injury
    4. As mentioned before, according to Philippine law, you are required to buy the Compulsory Third Party Liability car insurance (CTPL). This will cover up to P100,000.00 worth of medical/death insurance to the injured third party. If the expense exceeds this amount, the comprehensive insurance coverage will cover the excess expense.

    5. Voluntary Third Party Liability (VTPL) or Property Damage
    6. This covers damages to third party property caused by the normal and legal operations of your automobile.

    7. Auto Personal Accident (Auto PA)
    8. If an accident causes injury or death to you or any of the other people riding the vehicle, this coverage entitles you to monetary benefits to reimburse hospitalization, medical and funeral expenses.

    9. Acts of Nature
    10. This coverage entitles you to reimbursement for fixing your car which has been damaged by natural causes. For people living in areas prone to typhoons, floods etc., this coverage is particularly useful.

      The Acts of Nature (AON) is mandatory if you are planning to pay for your car in installments. The mortgagee would ask you to get the AON coverage as it reduces the risk to the car. You can avoid getting AON after a few years, if it says so on the mortgage agreement.

    Coverage Add-Ons for Car Insurance

    Most car owners find the basic comprehensive insurance package sufficient. However certain people prefer a little extra coverage for certain reasons. These are some of the optional add-ons that you could buy in addition to the comprehensive package. Remember that these are not offered by all companies and also varies in details.

    • Loss of Use: If/when your car is in the workshop for repair, this coverage takes care of your alternate transportation costs. Some companies even provide transport service when your vehicle is not working, on a temporary basis.
    • Road Side Service: Some insurance companies offer certain services like towing, fuel delivery and road side repair as an add-on coverage if/ when your car breaks down. Some companies even offer hotel accommodation under certain conditions. You will need to ask for details about which of these are covered and to what extent.
    • Certain companies offer cover for damage/stealth of items in the car, cover for parts of the car that is upgraded etc.

    There are many options that go beyond the basic comprehensive package, but you must contemplate how much you are willing to pay as coverage for these add-ons. Consider your driving skills, the area that you drive in frequently, the area that you park at most often and also how much you can spare for the extra coverage before making your decision.

    How to make a car insurance claim in the Philippines

    The procedure of claiming car insurance in the Philippines will vary depending on the insurance company that you have tied up with. However there are certain procedures that are common among all the companies.

    These are the basic requirements needed for filing a claim with a Filipino insurance company:

    • A Copy of the Policy and Official Receipt of Premium Payment: You will need to present the proof of your payment and policy to get your claim processed. Also, for claiming against a third party’s policy, you will need your insurer to provide a certificate of no claim.
    • You need to provide several photos of the damaged car. Photos of the damaged/lost parts, along with the license plate. You also need a picture of the whole car with license plate.
    • Photocopies of driver’s license official receipt, vehicle registration’s official receipt, Vehicle registration certificate and driver’s license.
    • Insurance Claim or Notarized Affidavit from the Insurer: This criteria can vary from company to company, however most companies require a legal written declaration of the sequence of events. Standard forms are given for these by some companies.
    • Repair Estimate: If you have a comprehensive car insurance or something similar to it, you must arrange for a repair estimate.

    This is the procedure you must follow in the event of an accident:

    1. As soon as possible, call and inform both the police as well as the insurer of the incident.
    2. Make sure that you have retrieved or secured the property that has been damaged in the accident.
    3. Under no circumstances should you admit legal responsibility or sign anything which admits your liability. Do not pay or promise to pay the involved third party individuals without the insurance company’s permission. Not doing so will help you in the event that the accident is proven to be not your fault.

    Requirements and procedures you need to follow while filling out a claim for specific cases:

    1. Case: Own Damage / Theft of Parts
    2. This claim can be made when you were in an accident and have caused damage to your own car. Remember that this is not a general claim. You need to read carefully before getting an insurance to see what exactly will be covered in this claim. For example, if your car is damaged while parked somewhere, the claim will not cover it.

      This is the step-by-step procedure to fill out a claim in the event of an accident:

      1. You need to provide several photos of the damaged car. Photos of the damaged/lost parts, along with the license plate. You also need a picture of the whole car with license plate.
      2. As soon as possible, call and inform the insurance provider who will tell you what all you should do. You must also request them to send someone for inspection.
      3. The required documents must be kept ready. If the incident does not include theft and property damaged only belongs to the insured, you may not need a police report. However this requirement will depend on the particular instance.
      4. Ensure that inspection is done, the car has been assessed for costs and that you have gotten the Letter of Authority (LOA) before going ahead with car repairs. Also, deductible needs to be paid before you get your car to the repair shop. In Philippines some insurance companies have preferred repair shops. You may need to get your car repaired in the garage that your insurer prefers. This depends on your insurance company, and must be inquired about while buying your insurance.
    3. Case: Personal or Passenger Injury or Death / Personal Accident & Passenger Accident
    4. You can buy covers that will take care of your financial expenditure when it comes to hospital bills in the event of an accident. This includes both the driver as well as passengers involved in the accident. There are cases where death is also covered in this particular case. Some policies include personal accident and passenger accident covers. These reimburse you and/or the passengers for medical expenses caused by injuries from an accident while driving or riding the insured vehicle. In some cases, it also covers death.

      This is the step-by-step procedure to fill out a claim in the event of an accident:

      1. As soon as possible, call and inform the insurance provider who will tell you what all you should do. You must also request them to send someone for inspection. If the insured is not able to do this, because of severe injury or death, an authorized representative can take his place to establish correspondence.
      2. The required documents must be kept ready. If the incident does not include theft and the property damaged only belongs to the insured, you may not need a police report. However this requirement will depend on the particular instance.
      3. A representative who will handle the procedure for reimbursement will be assigned to you by the insurance company.

      Requirements:

      In addition to the basic requirements, you will need the original copy of medical certificate, medical receipts and all the prescriptions of injured person/s. You will also need to submit photocopies of Birth certificate, Marriage certificate (if applicable) and Certificate of Employment. You will also need a certified copy of Death Certificate and Funeral Bills. To make sure that you make use of the insurance that you have bought, make sure that you provide all of these.

    5. Case: Third Party Bodily Injury / Death
    6. Third party includes people who are not driving/riding the insured car, and is not related to the insured person up to the second degree of consanguinity. To be considered third party, he/she should also not be the insured’s employee. In case a third party is injured in an accident with the insured car, this is the procedure to follow.

      1. As a priority, get medical attention to aid the third party
      2. The police at the scene of the incident would have taken down the details of accident. Make sure you go to the station and collect all the necessary documents so that if the third party decides to sue you, you will have some ammunition.
      3. You will be getting a claim letter from the third party describing their demands.
      4. There are certain insurance companies that assign representatives to you to help you in the process of organizing all the documents needed.
      5. Your insurer will handle the reimbursement.

      Requirements:

      In addition to the basic requirements, you will need the original copy of medical certificate, diagnosis report of the doctor in charge, medical receipts and all the prescriptions of injured person/s. You will also need to submit photocopies of Birth certificate (if a minor) and identification proving the age. You will also need a certified copy of Death Certificate and Funeral Bills. You will require a police sketch plan, letter of claim from the third party and Copy of (ITR) Income Tax Return for claiming loss of income. You may also provide any other documents depending on the nature of your accident. To make sure that you make best use of the insurance that you have bought, make sure that you provide all of these.

    7. Case: Third Party Property Damage
    8. Compulsory Third Party Liability (CTPL) is the cover that is required by law to be purchased. This does not cover property damage to third party’s property, only bodily harm. If you have bought additional coverage for third party’s property damage, these are the steps you need to follow to file a claim:

      1. As soon as possible, call and inform the insurance provider who will tell you what all you should do. You must also request them to send someone for inspection.
      2. Take photos of all the cars involved, the damaged parts, the license plate and the scene in general.
      3. You must first figure out which party is at fault. That party’s insurance company will take care of the expenses.
      4. The documents must be filled out by the third party claimant. They should also ensure that the police report which states that the insured has agreed to cover the damages are processed.
      5. The authorized repair shop will calculate the repair estimate. It is best if you are also present when calculating this so that there is no confusion later on.
      6. This estimate will be sent to the insured’s insurance company for further processing.
      7. The insurer will issue the LOA now and the deductible is paid by the insured. Then the repairs will start.
      8. The reimbursement process for non-motor will be different, depending on the kind of property it is and the insurance company.

      Requirements:

      In addition to the basic requirements, you will need a police sketch plan, letter of claim from the third party, Estimated repair cost and Original copy of Certification of No Claim from the third party’s insurer (if applicable).You must also provide photocopies of Drivers’ license or Car registration with MVVR. For non-motor, you must provide the proof of ownership, photos of the damaged parts and estimated cost of repairs. You may also provide any other documents depending on the nature of your accident. To make sure that you make best use of the insurance that you have bought, make sure that you provide all of these.

    9. Case: Acts of Nature
    10. If you live in a place with high chances of natural disasters like floods, typhoons, earthquakes etc., it is a good idea to get this particular coverage. The process you need to follow to file claim when Mother Nature’s wrath falls upon your precious car is simple. Most providers just need you to get your car to their workshop for repairs to be done.

    11. Case: Lost or Stolen Vehicle
    12. It is a terrible thing to discover that your car is lost or stolen. Getting yourself an insurance that covers the expense of such a situation will lessen the pain considerably. This is what you should do to file a claim in such an instance:

      1. As soon as possible, call and inform the insurance provider who will tell you what all you should do. You must also request them to send someone for inspection. You must also report the incident to the police.
      2. The authorized representative will be sent to Camp Crame in order to process the nationwide formal alarm. He/she will need to provide: the lost car’s original OR/CR, Original Copy of the Insurance policy, the car’s keys, among many other documents. Refer to your insurance policy for more details.

    Requirements:

    In addition to the basic requirements, you will need the complaint sheet which you will get from Traffic Management Group. You will need the Nationwide Formal Alarm Sheet which you will get from TMG. Certificate of Non-Recovery, the Insurance Policy, No Claim certification from the third party, Estimated repair cost and the keys of the car are also required.

    Car Insurance - Frequently Asked Questions

    1. Why is car insurance necessary ?
    2. Out of the various reasons available that necessitate the requirement of a car insurance, the most important reason is that car accidents do happen regardless of the cause, and insurance protects owners from the cost of liability and damages that result due to the same.

    3. Why are insurance premiums for cars more expensive for those who are younger?
    4. The assessment of risk is one of the most important aspects of any insurance. When the chances of making an insurance claim is higher, the insurance premium will also be higher. Premiums are higher for young drivers as they are seen to have lesser experience and hence constitute a greater risk as compared to those drivers who are more experienced.

    5. Why does it cost higher to insurance certain cars over others?
    6. All cars are not priced equally and certain cars are more expensive based on their features, mileage, customizations etc. In the event that these cars are damaged, it is more difficult to get them repaired and will also cost more. Cars that are older will also have higher insurance premiums as these cars are more likely to get damaged easily.

    7. What details should customers provide while applying for insurance?
    8. While applying for insurance, customers need to furnish details of the drivers who will be using the car, details about the vehicle such as the model, the make, year, number and others.

    9. What does compulsory third party liability insurance refer to ?
    10. CTPL or Compulsory Third Party Liability Insurance is a requirement of the state that says that all vehicles must have coverage against liability for bodily injury and death to third parties prior to operation and registration.

    11. How is a car totaled by insurers ?
    12. A totalled car refers to a car that has been damaged beyond repair. In terms of insurance, a car is considered as totalled if the cost of all the repairs is almost equal to that of the car’s value.

    13. What does comprehensive insurance refer to ?
    14. An insurance policy that covers more or less everything is referred to as comprehensive insurance. This includes loss of theft, collision, flood, physical damage and extended liability. Customers are advised to check carefully in case they are applying for the same.

    15. Should customers procure a medical payment coverage even if they have a health insurance cover?
    16. Although it is not completely necessary, it is advisable. Medical payment coverage covers every medical expense to all those who have been in a car accident regardless of who caused the accident.

    17. What happens if a person is hit by someone who is not insured?
    18. In case a customer is hit by someone who has not procured insurance then the customer himself will have to pay for the damages especially in cases where the motorist is not financially capable of paying for the repairs. Customers are also advised to look into uninsured policies.

    19. How can customers make a claim ?
    20. Customers need to provide certain necessary documents while making a claim. These are - receipt of the policy, a copy of the care insurance policy, certificate of registration of the vehicle that is covered, receipt of registration, a copy of the driver’s license, stencil of serial number and motor number, a notarized affidavit or police report, estimate of the repair, pictures of damage, whereabouts of insured unit, certificate of no claim of third party vehicles and other documentation involving medical transactions.

    21. What does an excess refer to ?
    22. The first part of the claim that the insured has to pay is referred to as excess. For example, in case the customer’s policy has P2000 excess, and they will have to pay P5000 for repairs then the insurance company pays P3000.

    News About Car Insurance

    • Php1 Billion worth Fraud Pertaining to Vehicle Insurance in Philippines Every Year

      According to a non-life insurance group, fraud relating to vehicle insurance in the Philippines reaches as high as Php1 Billion every single year. Reinsurers Association and the Philippine Insurers have confirmed that the vehicle insurance industry is losing almost a Php1 billion to motor related fraud committed by organized groups and individuals alike. This type of insurance fraud ranges from false car crashes to car thefts and repairs.

      Arturo Reyes who is the Pira chairman on the technical committee on car insurance has said that fraud alone has constituted to over 10% of the total loss in motor car insurance. However, this number is just conjecture and if a thorough study is conducted, he bets that the actual outcome will be way higher than these estimates.

      Vehicle insurance fraud is not only an increasing problem in this country but across all countries in the world where the estimated losses have surpassed Php50 billion per year. The Highway Patrol Group of the Philippine National Police have covered 74 different instances of vehicle motor insurance fraud between 2014 and 2016.

      19th July 2016

    • Car insurance reforms pushed by Suansing

      According to Alberto Suansing, former chief of the Land Transportation Office, stated that there can be no corruption if there are no corruptors. This statement was made by him in response to a question asked by some non-life insurance organisations about incoming President Rodrigo Duterteto’s administration.

      Suansing urged the players of the insurance industry to cleanse the ranks. According to him, the third party liability insurance scheme for motors is a major corruption source. Dishonest insurance agents and companies have taken advantage of it too.

      13th June 2016

    • Newly Appointed LTO Chief Confident of Clearing Backlog & Stimulate Reforms

      Roberto Cabrera, the newly appointed Chief of Land Transportation Office (LTO) is confident of finding a resolution to the agency’s key issues, represented by concerns such as the backlog in delivery or car plates and license cards to vehicle owners. Cabrera, who was previously the director of LTFRB (Land Transportation Franchising and Regulatory Board), has been a strong advocate of environmental concerns.

      The agency has been plagued by controversies in the recent past such as irregularities in awarding contracts to consortiums. Cabrera wants to involve various stakeholders within the LTO and other government agencies to put an end to the woes at the earliest. In doing so, his first assignment will be to contact the legal stakeholders to stay abreast with ongoing legal issues followed by fulfillment of pending commitments such as issuance of car plates. It must be noted that the agency has outstanding issues in the areas of driver's license and insurance as well.

      26th January 2016

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