Philippine Car Insurance jargons

No Comments »
Philippine Car Insurance jargons

To help people understand some Insurance jargon. team summarized the commonly used terms in the car insurance industry in the Philippines and here they are.


Car Insurance Policy –  Is the contract between the client and the insurance company.  This contract states that the insurance company agrees to indemnify or pay the client against all perils stipulated in the policy in exchange for a premium paid by the assured.  This is renewable every year.


Assured –  Refers to the client or policyholder.  He/She is the one who purchased the car insurance policy and will be the one indemnified in case of claims.


Premium –  Is the amount of money to be paid in full to the insurance company by the assured before the policy takes full effect in exchange for the protection provided.  It has to be paid in full before any claim is settled.


Deductible –  Also called “participation” is the amount of money to be paid to the insurance company by the assured for every claim he files.  This is also chargeable per incident.  The insurance company may settle the claims in cashless the deductible charge for every incident.


FMV(Fair Market Value)– This is the assessed value of the car at the present time.  It is the value accepted by the insurance company for them to ensure the car and the value used to settle a total loss claim.


Acts of God/ Nature clause –  This is a feature that may be added in the insurance policy to cover the car against natural perils/risks such as flood, storm, earthquake, and/or other risks arising from the said natural causes.   The client may add an additional premium for this feature to be included in the policy.


Terms of payment –  This is the length of time given to the client to pay the insurance premium.  Some insurance agents and brokers give 3 to 6 months terms to their clients.


Bodily Injury –  Bodily injury coverage is another insurance coverage in the car insurance policy.  This covers the people that may be injured by the assured.  This will be paid in excess of the CTPL insurance that all registered cars have.


CTPL –  Compulsory third party liability insurance is the insurance required by the LTO to register a car in the Philippines.  This is paid every year and covers up to P100,000 for third party bodily injury claims.  Loss of life, limbs are to be paid in full.  Other body injury claims may be subject to the limit.


Property damage –  This insurance feature covers the assured against damaged incurred to third party by the assured.  The limit of cover may range from P100,000 up to P500,000.  This is one of the features included in buying a comprehensive insurance policy.




Author: erwin reyes

Erwin has a combined experience of more than 15 years in the car insurance industry in the Philippines and Australia. Loves cars and enjoys to sourcing out great deals for its clients