The Different Types of Auto Coverage in the Philippines
One of the most important decisions to make when it comes to owning a car is the insurance that you should get with it. After all, a car is a hard-earned investment, and protecting it is the top priority for all car owners. Nowadays, with so many car accidents and damages reported at every news portal, it has started to become a necessity than a luxury. Plus, it’s a great way to have peace of mind with the hypothetical car accident scenario.
However, an astounding number of car owners are very much in the dark about the true extent of car insurance – such as the different types, what sort of insurance covers what situation, and even the extent of coverage it can offer. This lack of knowledge can prompt car owners to avail of an insurance policy that won’t adequately cover damages that your car may sustain depending on the situation.
Today, we explore the different types of car insurance that are available in the Philippines:
Compulsory Third-Party Liability Insurance
Section 373c, Chapter VI of the Insurance Code of the Philippines mandates all car owners to get compulsory third-party liability insurance (CTPL) upon registration of the vehicle. This ensures any third parties (people whom you do not share familial relations with like your friends) in the instance that they encounter an accident while riding your car or even suffer an injury outside of your vehicle if you’ve caused it.
This coverage accounts for up to Php100,000, from bodily injury to death of any third party in an accident caused or arisen out of the use or operation of the insured vehicle. The insurer will pay all sums necessary to discharge the insured from liability, but does not cover loss or damages to property and is very limited in this aspect.
More can be learned about this insurance with our infographic.
Comprehensive Car Insurance
We’ve also discussed the comprehensive car insurance before (specifically, its benefits) in an infographic, but to recap, it’s one of the higher levels of protection you’ll be able to get for your vehicle due to its wide protection scope – third-party, theft and vandalism, weather and natural calamities, animal damage, and fire just to name a few. It’s also called Excess Bodily Injury Or Voluntary Third Party Liability for some.
Because CTPL has a Php100,000 limit in coverage, any excess can be shouldered by your comprehensive car insurance provider. Unlike CTPL, comprehensive car insurance isn’t mandatory, but it does provide a bigger measure of financial security by covering car repairs and other damages in case of unfortunate incidents that might inflict damages that CTPL won’t be able to fully cover.
Third-Party Liability Insurance
Even the most defensive of drivers can still get involved in car accidents and cause you to accidentally damage the vehicle or property of others. Save yourself from the hassle and the costs of paying for compensation from your own pocket by getting third-party liability insurance.
Additional types of insurance
Not all comprehensive car insurance can cover you from everything else, especially if the original clause only covers some types of instances.
- Acts of God/Acts of Nature covers damage from flooding, weather, and natural calamities
- Personal Accident provides coverage for any injuries sustained during a road accident
- Medical Reimbursement lets you reimburse medical expenses from injuries related to the accident
- Riot, which is for protest or riot-related damages
- The upgrade covers any damages that have been sustained with upgrading car equipment
- Loss of use which covers transportation expenses while waiting for the car to be repaired (some may also offer temporary transport)
- Roadside service that may cover: towing, fuel deliveries, hotel accommodations, and roadside repairs
Before adding any of these to your comprehensive car insurance, determine first how and where you’ll use your car – which in turn will help you foresee what damages that your car may sustain and what addon will cover it. For example, driving daily on a route that goes through places that are known to hold rallies such as EDSA is a good reason to consider a Riot addon, while living in calamity-ridden areas may need Acts of Nature coverage.
Let’s face it – accidents can happen anytime, anywhere, to anyone. And while it may be a great headache to deal with the aftermath of the accident, it’s at least comforting to know that you are financially covered well by your insurance and are ready for anything.
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