• Glossary of Car Insurance Terms

    When you buy a car, the only way you can enjoy the experience is when you can drive with confidence. Where does the confidence come from, apart from your natural skills? The answer is Car Insurance. Without a complete insurance cover on your vehicle, you are never free of worries on the road.

    The following terms and definitions will help you understand car insurance and its significance, better.

    A

    Accident A sudden unfortunate incident leading to injury, loss of life or damage to property.
    Assured Synonym for a policyholder, insured individual or someone with an insurance policy.
    Auto Insurance An insurance policy that protects you against losses incurred while owing or using an automobile.
    Auto Personal Accident (Auto PA) An insurance that covers you or any other people with you in the vehicle in case of injury or death in an accident. It entitles you reimbursement on medical, hospitalization and funeral expenses.
    Acts of God/Nature (AON) An insurance policy that provides cover to your vehicles in the case of damages caused by natural calamities. Mostly applicable to those residing in the typhoon-prone areas of Philippines.

    AON is optional, however in case of mortgaged cars, the mortgagee will have to add this cover as they continue to have a stake in the car’s condition until the owner completely owns it by making the full payment.

    C

    Cover The benefits and terms of protection offered in the car insurance policy.
    Comprehensive Cover An additional component of the third party car insurance cover on your automobile. This portion of the cover includes damage or loss of car caused by an accident or theft. It also includes repair cost, replacement cost and transportation charges incurred owing to uninsured drivers.
    Claim A request raised to get a reimbursement on the expenses incurred to repair damages to the car or get a replacement in case of car theft. It is as per the terms and conditions of the car insurance policy.
    Compulsory Third Party Liability(CTPL) Insurance that is compulsory to have if you are a car owner or are driving a car in the Philippines. It covers liability to third-party in case of bodily injury, damage to property or death caused by your automobile.

    D

    Discount A reduction in your car insurance premium, provided your car meets the terms and conditions mentioned in the policy.
    Deductible A part of the auto insurance claim that needs to be paid by you, prior to the expenses settled by an insurance claim.

    F

    Fire and Theft Cover An additional feature of the car insurance wherein the losses resulting from theft or a fire accident, are covered by the insurer.

    I

    Insurer A company providing car insurance that safeguard you and your vehicle on the road from death, damage, loss or injury.

    L

    Loss of Use An additional coverage that entitles you a reimbursement of the expenses incurred for transportation, while your vehicle is under repair. Sometimes, the insurer also provides temporary mode of transport during the period of your vehicle’s absence due to repair.

    M

    Market Value The determined value of your automobile in case of damage or loss, where it requires to be replaced. The cost of replacement of your car is calculated based on the condition, model and the age of the car.

    N

    No Claim Bonus The bonus that you receive in the event of no claims made throughout the year within the insurance period. You can avail a discount on your premium if you have a claim-free year in a comprehensive insurance policy.

    O

    Own Damage(OD) or Theft The part of insurance that covers damage caused by self to your automobile or in the case of theft. However, only damage by collision is covered and not those caused by natural disasters.

    P

    Premium It is a fixed amount the insurance holder pays to the insurance provider to offer coverage to your vehicle. The losses that are covered include economic losses incurred in an accident or theft of your vehicle.
    Policy Term It is the duration of the car insurance policy’s validity.

    R

    Road Side Service An additional cover offered by some insurers that include road side services in case of your car breaking down. The coverage may also either one or a combination of services such as fuel delivery, towing and repairs.

    Some insurers include special covers that entitle you hotel accommodation in certain cases.

    T

    Third Party The victim of an automobile accident. It also refers to the individual or property that is indirectly involved in an incident involving your car.

    U

    UPPA (Unnamed Passenger Personal Accident) An insurance cover that includes your driver and passengers in case of an unfortunate incident leading to injury or death caused when travelling in your vehicle.

    V

    VTPL-BI Voluntary Third Party Liability for Bodily Injury or VTBL-BI is an added feature of CTPL. It provides extra coverage over and above the CTPL limit.
    VTPL-PD Voluntary Third Party Liability for Property Damage covers the expenses when an accident involves property damage of a third-party.
    Vehicle Replacement A feature of the car insurance policy which requires the insurer to replace your vehicle in case of loss/damage or pay an equivalent value of your original automobile.

    According to the Philippine Law, all vehicle owners must mandatorily buy a CTPL before registering a new vehicle or renewing their vehicles. Selecting the right car insurance can be time taking and confusing. Hence, it is important to choose the ideal insurance provider with an insurance premium suiting your lifestyle, driving skills and pocket!

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