In the Philippines, all motor vehicles (regardless of the nature of use, commercial or otherwise) are required to have an active CTPL at all points of time by law. Aimed at ensuring monetary indemnification for the insured against all possible liabilities arising our of an accident or mishap involving third party person, the Land Transportation Authority (LTO) in the Philippines mandates all motor vehicles to have this basic insurance coverage before registration of the vehicle.
Section 373(c), Chapter VI of the Insurance Code of the Philippines defines the rules and definition of third party for administration of relief and compensation.
The CTPL covers liabilities arising out of a vehicular accident that causes bodily injury or death of a third party person involving the insured vehicle. It does not offer any monetary relief relating to damage of the insured vehicle, injury/death of the insured member. Occupants of the car involved in the accident who are unrelated to the insured member, also find coverage under the motor insurance option.
Extent of Coverage
The Compulsory Third Party Insurance offers a cover of up to P100,000 as death benefit for third party persons. It also offers medical and hospitalization benefits along with coverage for dismemberment and permanent disability. The benefits are also extended to the passenger victim in case of Public Utility Vehicles (PUV). In cases where there is death or bodily injury to the third party, the CTPL shields the victim against proving the “fault” to be eligible to claim the benefits laid down under the law. Simple documentation such as police or medical reports are required to file the claim.
Where can I purchase?
The CTPL is arranged for by the dealer if you’re in the process of registering a brand new vehicle. After purchasing the insurance policy, a COC (Confirmation of Cover) is issued by the insurance company as as confirmation. This copy is presented to the local LTO offer as a proof of insurance to confirm the availability of third party insurance. The COC contains basic details pertaining to the vehicle and the insured member such as name, details pertaining to the vehicle such as chassis & engine number and so on.
After the expiry of an existing coverage, the insurance can be renewed either with the same insurer or with a new one. Since this is a very basic coverage, the benefits offered by insurers are more or less the same across insurance company.
What to Look out for ?
Whether you’re buying or renewing a CTPL for your car, it's paramount to inspect a few aspects of the policy before buying one. Since the costs of procuring a third party insurance is largely regulated, one will find little difference in the premium amount paid. All insurance companies operating in this segment are compelled by law to issue the CTPL on demand. Therefore, the most visible comparison you can make while signing up is the track record and the claims settlement ratio of the insurance company that you’re opting for.
The second most important part of comparison lies with the extent of coverage. Some insurers may offer only one year as standard while other may offer up to 3 years coverage at one go. Longer coverage period ensures savings and also continued coverage without having to worry about the hassles of renewing often.
This objective can be achieved by using comparison tools and resources online and offline to draw conclusions.
While it's a statutory requirement to have insurance for protection against third party liability, it does not come recommended in the times where driving your vehicle comes with so many potential risks. What you will need is a Comprehensive Car Insurance which not only manages the third party liability, but also ensures all round protection to self and the insured car. It offers monetary protection against damages caused to to the vehicle due to accident, theft and burglary along with provisions of protecting legal liabilities of damage caused to third party property.
It also offers comprehensive protection against damages caused to acts of nature such as earthquakes & floods. One can also look forward to customizing this type of car insurance with benefits that can inserted into the policy based on the need and circumstance. The costs are comparatively higher, but the benefits are far more appealing when compared to a CTPL.
If you’re in the process of renewing car insurance and contemplating on changing the insurer, be sure to compare products offered by various insurers to get the best deal. Some of the them offer pleasing benefits such as rebates, Add On benefits and other appealing features.
Common Misconceptions About CTPL
There are quite a few misconceptions when it comes to CTPL and its benefits. What we must understand is this is a very basic insurance cover that aims to fulfill the legal provisions in this regard. Lets look at some of the most commonly misunderstood facts.
- The benefits of CTPL are as good as that of a Comprehensive Vehicle Insurance
- It covers the person driving the vehicle involved in the mishap
- The cover amount can be increased
While the former aims to cover only injury/damages to a third party person, the latter ensures a comprehensive cover not only for third party obligations, but also offers compensation in case of a mishap/accident to the occupants of the vehicle, damages to the vehicle itself and comes with a host of Add On options. Therefore, CTPL is just a minor part of a Comprehensive cover.
It offers no compensation to the driver of the vehicle. It's designed purely to answer monetary obligations arising out of injury/death of a third party. Section 373(c), Chapter VI of the Insurance Code of the Philippines clears the air in this regard.
As provided in the law, the maximum coverage amount claimable from the insurer is P100,000 in case of death or injury caused to the third party person. Therefore, the insurer can only offer you a cover of what is permissible under the law. If you’re looking at additional benefits, a Comprehensive cover will do the trick.