Reports compiled over the years show that road accidents are the one of the leading causes of deaths in the Philippines. Surveys and reports of the Philippine National Police from the year 2006 show us that on an average 41 traffic accidents take place every single day due to mechanical defects in the vehicle, driver errors, using cell phones while driving, driving under the influence of alcohol, over speeding or even mistakes of someone else on the road. All these accidents surmounted to over 3767 injuries, 674 fatalities and over 10,623 property damages. This was the case 10 years ago.
A decade down the line, these numbers have more than quadrupled.
What do these numbers indicate to us? All vehicle owners in the Philippines are exposed to hazards on the roads. Irrespective of how careful or disciplined you are while riding or driving in the Philippines, if other drivers around you are sleepy, undisciplined or even in a hurry, you could still be at risk.
Accidental collisions involve physical injuries as well as property damages. The worst situation that we can think of is that it could be fatal. When such instances take place, filing a lawsuit can be even more harrowing than being a victim on the road itself. It drains us of our emotional energy and time apart from the extra hassle of attending multiple court hearings. Another possibility is of your vehicle getting stolen and hence taking an insurance for our vehicle/car becomes essential to protect us from financial losses that take place in the process.
Here is a guide to choosing the right insurance and coverage for yourself.
What is a Car Insurance?
A car insurance is a contract where an insurer indemnifies the insured against any damage, loss or liability that is a result of an accident in exchange of a fixed premium, most occasionally one that is annual in nature.
What are the things to consider before choosing a particular car insurance?
Choosing a car insurance is no different than choosing a life insurance for yourself. After completing all the primary research, choose a company that you know is financially sound. You are buying an insurance to protect yourself financially. All the information that you need is available at the click of a button on the internet in the form of reviews and news. Check the ranking if the company at the website of the Insurance Commission of the Philippines at insurance.gov.ph. The ranking on this site is always up to date and will give you good insight into their financial capabilities and ability to settle all insurance claims promptly. This should not stop you from taking a look at their ratings from other independent rating agencies.
Choose an insurance company that is known to be reputable in the market and have a proven track record of taking care of their customer’s needs efficiently, fairly as well as quickly. It is highly recommended that you choose an insurance company that is ethical and having professionals who are affiliated to reputable firms. They are trained to give you the right advice on the right coverage for your insurance requirements.
What are the kinds of coverage that is available on a car insurance in the Philippines?
Ideally, a comprehensive car insurance should have the six below mentioned components -
- Compulsory Third Party Liability or CTPL - In the Philippines, it is required that before any vehicle is registered and operated, it must compulsorily be covered against liability for bodily injuries and death of the third party. A Schedule of Indemnities for death or bodily injuries is available in Section 1/11 of a standard car insurance policy.
- Theft and Own Damage (Theft/OD) - This component of the car insurance protects the insured against theft (loss) or any kind of accidental damage to the vehicle of the insured.
- VTPL - EBI (Voluntary Third Party Liability - Excessive Bodily Injury) - This liability includes excess bodily injuries. This is the second level to the CTPL coverage. This component provides additional insurance coverage in excess of the Php100,000 that is allotted by law. If the injury to the third party is grave and the treatment of the injury lasts for a longer duration such as disability, you may have to shell out the costs from your pocket.
- VTPL - PD ( Voluntary Third Party Damage - Property Damage) - This clause provides cover to the insured person against liability arising out of damage caused to the third party property by the insured vehicle. It indemnifies the insured against costs of repairs and replacements involving third party property such as other motor vehicles.
- Perils Cover (Extended) - On payment of an additional monetary value to the existing policy premium, perils such as flood, typhoon, earthquake, volcano and other man made perils such as Strike, Riot & Civil Commotion will be covered under the same policy.
- Personal Accident Cover - A cover that adds great value to the existing protection provided by a standard car insurance policy. Here, losses or expenses incurred due to the death or disablement of the occupants of the vehicle involved in the accident are covered. It disburses a lump sum to the immediate family members in case of death and offers financial relief to cover the costs of medical treatment of those injured in the accident.
Depending on the insurer in question, there can be other Add On options (cover) which can be customized.
Leading Insurance Companies in Philippines Offering Car Insurance
- MAPFRE Insular: A leading insurance brand in the Philippines, this company was established in 1934 and ranks among the top 5 insurance companies across multiple categories. This joint venture company is owned by MAPFRE of Spain (75% stake) and Insular Life Assurance Co. Ltd., a locally grown insurance major.
In its Car Insurance portfolio, it offers the following products for car owners looking forward to cover various statutory and other associated risks.
- Compulsory Third Party Insurance
- Auto Liability Insurance
- CTPL With Road Assistance
- Comprehensive Car Insurance
- Comprehensive Car Insurance with Acts of Nature
- Standard Insurance: Founded in 1958, this company is renowned for its variety of products it offers in the insurance segment, defined by general and packaged products such as Travel, Office and Home insurance which provide comprehensive insurance solutions. With a rich experience of 57 years backed by a strong network of 42 branches, Standard Insurance Motorcar Insurance offers the right mix of features to cover associated risks.
The following cover options define the Motorcar Insurance portfolio.
- Own Damage
- Compulsory Third Party Liability (CTPL)
- Acts of Nature Coverage (AON)
- Excess Bodily Injury (EBI)
- Third Party Property Damage (TPPD)
- Personal Accident (PA) Rider
- Pioneer:Established in 1966 as an arm of Pioneer Insurance & Surety Corporation, the group has been providing a plethora of insurance products catering to the needs of sector based groups. It also offers a host of life insurance products in the country. In the Motor Insurance segment, Pioneer offers the following products to fulfill statutory and other requirements.
- Comprehensive Motor Insurance
- Compulsory Third Party Liability
- PNB Gen: PNB General Insurers Co., Inc. or PNB Gen as popularly known, is one of the new age insurance companies operating across the length and breadth of Philippines. Founded in 1991, it offers insurance products in the non-life category such as Marine, Surety, Casualty Insurance and Motor Car Insurance. The Motor Car policy offers covers for all possible risks associated with owning a car such as damage/theft to the vehicle, injury/damage to a third party property to name a few.
The following cover options can be included under the car insurance policy.
- Theft & Own Damage
- Compulsory & Voluntary Third Party Liability
- Acts of Nature
- Auto Personal Accident
- Paramount Life & General Insurance Corporation: The group traces its history back to 1950, when it was founded with a vision to provide insurance solutions in the non-life sector. Since then, Paramount has strengthened its presence in the Philippines by way of multiple mergers and acquisitions. It offers a variety of Life Insurance products for individuals and groups along with a host of options in the non-life segment such as Fire, Engineering, Marine and Motor Insurance.
The cover options below can be added to the car insurance policy. Some of them are mandatory by law.
- CTPL ( Compulsory Third Party Liability)
- Loss and/or Damage Cover
- Property Damage
- Excess Liability Insurance
- Personal Accident Cover
- Other Extensions
Tips & Advice
Insuring your car is mandatory by law. Do not buy one for the heck it. In this age marred by ever increasing risks associated with driving, it's better to be safe that sorry. Analyse the risks you would encounter and choose the plan and cover options wisely. It may be expensive, but the benefits are umpteen. Before buying or renewing car insurance, revisit the terms and conditions to see how you can benefit from availing a better scheme either from the same insurer or a different who can offer perks of switching over.
The best possible way to compare products offered by insurers is to compare them online. BankBazaar.ph offers you the right information on all that you need to know while buying or renewing Motor Insurance. You can look up for more information by navigating your way through our Insurance ---> Car Insurance section.