Reasons Why Only Few Cars are Insured in the Philippines
There are a lot of cars in the Philippines. Given the number of vehicles in the country, it is surprising why a lot of people still don’t have the right car insurance with them. Isn’t it surprising to see cars that do not have the necessary car insurance? So why is it that only a few cars are insured in the country? Here are a few reasons why.
Culture
One of the things that make car insurance a difficult commodity to sell, is the fact that we have a unique culture. If you’ll ask just how much savings does an average Filipino has, most people will most likely have a small chunk of income that goes to savings. Most of the income goes to pertinent needs such as food.
This goes to show that our culture is leaning towards a reactive type of culture more than preventive. This means that people will most likely deal with things that are in front of them, then anticipate problems. Thus, it is common to see uninsured cars in the Philippines.
Prevalence of older vehicles
Unlike neighboring countries like Singapore, the Philippines is quite lacking when it comes to approving cars on the road. The Philippines allow jeepneys that are barely safe for public transport. Cars that are barely working could still be registered. This means that it is no longer practical for the car insurance company to cover the vehicle. Given the likelihood that it will have engine trouble, uninsured cars in the Philippines become a common feature in the Philippine highways. Also, for most car insurance companies, they’d most likely just cover a car that is below ten years old.
Lack of knowledge in insurance
Retirement, education and health insurance, and long term investment plans are pretty much alien to many Pinoys. It is also not surprising from this standpoint why a lot of networking companies that run on Ponzi schemes make it big in our country. It is because of the fact that we lack financial literacy.
This is partly to blame why most car owners lack knowledge when it comes to jargon involving car insurance. If you’ll look at the 2009 Ondoy that flooded a number of areas in Metro Manila, you’ll notice how only a few car owners have the act of God coverage. It was only after the incident when car owners started to look at this particular coverage closely. It wasn’t surprising how from a 2% penetration rate in 2009, auto insurance companies recorded a 5% penetration rate for the succeeding year after Ondoy.
Buying power
Economics will also play a huge role in how we purchase products and services. How many people have a decent pay in their salary? How much does gas cost these days? These concerns will definitely affect the way car owners make their decision whether or not to purchase a car insurance policy.
What most people don’t know is that the cheapest car insurance premium, with all the necessary coverage can be made available to you. Given iChoose being the leading car insurance comparison in the Philippines, you’d be able to get a quote for your vehicle. Only if people will look at their options, it is possible to decrease the number of uninsured cars in the Philippines.
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