What is a car insurance policy?

A car insurance policy is a contract between a policyholder and an insurance company that protects the policyholder financially in the event of an accident or other covered event involving their vehicle. The policy typically includes liability coverage, which pays for damages or injuries that the policyholder is responsible for, as well as coverage for the policyholder's own vehicle, such as collision and comprehensive coverage. The policy may also include additional coverage options such as roadside assistance, rental car coverage, and personal injury protection. The policyholder pays a premium in exchange for the coverage provided by the policy.

Why should I buy car insurance?

Purchasing car insurance is an important decision for any vehicle owner. There are several reasons why one should consider buying car insurance. Firstly, in most states, it is mandatory by law to have car insurance. Failing to do so can result in hefty fines and penalties. Secondly, car insurance provides financial protection in case of an accident, theft, or other covered events. Without insurance, the cost of repairs or replacement of your vehicle and any medical expenses will have to be borne by you out of your pocket. Thirdly, liability coverage in your insurance policy will pay for the damages and injuries of the other party in case you are found to be at fault in an accident. This protects you from any financial loss that may arise from being held liable. Fourthly, having car insurance gives you peace of mind while driving, knowing that you are protected in case of an unexpected event. Lastly, many insurance policies offer additional coverage options such as roadside assistance, rental car coverage, and personal injury protection, which can provide even more financial protection and peace of mind. It is important to research and compare the different options available in the market to find the best coverage at an affordable price.

Is car insurance mandatory in the Philippines?

In the Philippines, car insurance is mandatory for all registered vehicles. According to the law, every vehicle owner must have a valid insurance policy that provides at least the minimum liability coverage required by the government. The minimum coverage includes third-party liability, which pays for damages or injuries that the policyholder is responsible for to other parties involved in an accident. In addition to the mandatory liability coverage, many insurance providers also offer additional coverage options such as collision and comprehensive coverage, personal accident coverage, and more.

How much is the car insurance premium for my vehicle?

The cost of a car insurance premium for your vehicle can vary depending on a number of factors such as the make and model of your car, your driving record, the area you live in, and the coverage options you choose. To get an accurate estimate of the premium for your specific vehicle, you should contact an insurance provider and provide them with the necessary information about your car and your personal circumstances. They will be able to give you a quote for the premium based on the coverage options you choose. It's also a good idea to compare quotes from multiple providers to ensure you're getting the best deal.

What should I do if my car insurance is already expired?

If your car insurance policy has already expired, there are several steps you should take. Firstly, you should contact your insurance provider as soon as possible to inquire about renewing your policy. They may be able to extend your coverage or offer you a new policy. If your insurance provider is unable to renew your policy or if the premium is too high, you should compare quotes from other providers to look for a policy that offers the coverage you need at a price you can afford. Once you have a new policy, it's important to update your vehicle registration with your new insurance information. It's also important to be aware of the risks of driving without a valid insurance policy, as you could be fined by the authorities and won't be covered in case of an accident. To avoid any legal or financial issues, it's important to renew your policy as soon as possible and always keep a copy of your insurance policy and your insurance ID card in your vehicle to make sure that the policy is valid and up to date.

How is car insurance premium calculated?

Car insurance premiums are calculated based on a variety of factors, including: The make and model of the vehicle: The type of vehicle you drive can affect the cost of your premium. Luxury or high-performance cars tend to have higher premiums than more common, standard vehicles. The age and driving history of the driver: Your age, driving experience, and driving record can also affect the cost of your premium. Young or inexperienced drivers, or drivers with a history of accidents or traffic violations, may pay more for their insurance. The area where the vehicle is garaged: The area where you live and park your vehicle can also affect the cost of your premium. Urban areas tend to have higher premiums due to a higher risk of accidents and theft. Coverage options: The coverage options you choose, such as liability, collision, comprehensive, and personal injury protection, can also affect the cost of your premium. Deductibles: The amount of your deductibles also play a role in determining the premium. Higher deductibles usually mean lower premiums, and vice versa. Insurance companies use complex algorithms to calculate the premium based on these and other factors, and the premium can vary widely between companies and policies. It's always a good idea to compare quotes from multiple providers to find the best deal.

Can car insurance be transferred to the new owner when buying a used vehicle?

When purchasing a used vehicle, the car insurance policy can be transferred to the new owner under certain conditions. The policy must be transferable: Not all insurance policies are transferable to new owners. You should check with your insurance provider to confirm if your policy is transferable. The new owner must qualify for coverage: The new owner must meet the insurance company's underwriting requirements for coverage. They will need to provide information about their driving history, the vehicle, and other factors. The transfer must be done before the policy expires: The transfer of the insurance policy must be done before the policy expires. If the policy has already expired, the new owner will need to obtain a new policy. The premium may change: The premium on the transferred policy may change based on the new owner's information. The policy must have been paid and active: The policy must have been paid and active at the time of transfer, if not the policy will not be valid. It's also important to note that, in some cases, the new owner may choose to purchase a new policy instead of transferring the existing one. It's always best to check with the insurance provider and the new owner to determine the best course of action.

Can one car owner buy two policies for the same car?

No, one car owner can not have two insurance policies for the same four-wheeler. However, a third-party insurance plan and own damage cover can be purchased separately for a four-wheeler, in place of a comprehensive four wheeler insurance.

How to Claim Car Insurance Online?

A car insurance claim can be made online by following the below-mentioned steps: Step 1: Register the claim by visiting the website or mobile app Step 2: After claim registration, the car’s owner gets a claim registration number Step 3: After claim registration, the four wheeler insurance company sends a surveyor the place of accident/mishap to assess the extent of damage. The policyholder needs to submit the required documents at this stage to the surveyor to proceed with the claim. Step 4: The damaged four wheeler is then sent to a garage for repairs. Depending on the type of garage, the payment for the claim will be made. Step 5: If a network garage is chosen, the bill is directly settled by the four wheeler insurance company with the garage. In case, the garage is not a part of the insurance company’s cashless garages network, the policyholder needs to settle the bill which is later reimbursed by the insurance company.

What factors do insurance companies take into account when approving applications for car insurance?

Insurance companies consider a variety of factors when evaluating car insurance applications. Some of the most important factors include: The make and model of the vehicle: The type of vehicle you drive can affect the cost of your premium and the coverage options available to you. The age and driving history of the driver: Your age, driving experience, and driving record can also affect the cost of your premium and your eligibility for coverage. Drivers with a history of accidents or traffic violations may be seen as higher risk and may pay more for their insurance or be denied coverage. The area where the vehicle is garaged: The area where you live and park your vehicle can also affect the cost of your premium and your eligibility for coverage. Urban areas tend to have higher premiums and more restrictive coverage options due to a higher risk of accidents and theft. The purpose of use of the vehicle: The usage of the vehicle is also considered while evaluating the application, such as if it is used for personal or commercial use, which can affect the cost of the premium and the coverage options. The coverage options: The coverage options you choose, such as liability, collision, comprehensive, and personal injury protection, can also affect the cost of your premium and your eligibility for coverage. Credit score and financial stability: Some insurance companies also consider the applicant's credit score and financial stability as a factor in determining their risk level and the premium. It's important to note that different companies may have different underwriting guidelines and the factors that are considered may vary. Additionally, some states have laws that prohibit insurance companies from using certain factors in their underwriting process.

Can I still be eligible for car insurance claims while my application is being reviewed?

Whether you will be eligible for car insurance claims while your application is being reviewed depends on the specific terms of your policy and the circumstances of the accident. If your application for car insurance is currently under review, and an accident occurs before the policy is approved and becomes effective, your claim may be denied if the policy has not yet been approved. In this case, you would not be covered for the accident and would not be able to file a claim. Your insurance policy will only be effective if already approved and payment has been made.

When should I notify the police that my car was stolen or involved in an accident in order to file an insurance claim?

If you are involved in a car accident or your car is stolen, it is important to report the incident to the police as soon as possible in order to be able to file a claim with your car insurance company. Here are the steps that you should take after a car accident or theft: Report the accident or theft to the police: Call the police to report the accident or theft. The police will come to the scene and create a report that will be used to document the incident. Make sure you get a copy of the police report. Inform your insurance company: Contact your insurance company to report the accident or theft. Provide them with the details of the incident and the police report. They will guide you through the claims process. Document the incident: Take pictures of any damage to your vehicle or the other vehicle(s) involved in the accident. Also, make a list of any personal items that were stolen if your car was stolen. This will be helpful when filing your claim. Keep all records: Keep all records, including police reports, repair estimates, and receipts, related to the incident. Your insurance company will need these documents to process your claim. It's important to report the incident as soon as possible to your insurance company, as some insurance policies have a time limit for reporting accidents or thefts. Failure to report the incident in a timely manner may result in a denied claim.

What is the meaning of voluntary deductible in car insurance?

In car insurance, a voluntary deductible is an amount that policyholders agree to pay out of their own pocket before the insurance company starts covering the costs of a claim. It is a self-imposed limit on the amount of coverage that you can claim from the insurer. It is also known as "excess" or "co-pay" For example, if you have a voluntary deductible of $500 and you are in an accident that causes $5000 worth of damage, you will be responsible for paying the first $500 of the repair costs, and your insurance company will cover the remaining $4500. The main advantage of choosing a voluntary deductible is that it can lower the premium you have to pay for the insurance policy. This is because the insurer will have to pay out less money in the event of a claim. However, it also means that you will have to pay more out of pocket if you need to file a claim. It's important to consider your driving habits, budget and the value of your car while choosing the voluntary deductible. It is not recommended to choose a high voluntary deductible if you are an accident-prone driver or if you are on a tight budget, as it may not be affordable to pay for the deductible out of your own pocket.

What to do if there is a mistake in my car policy document?

If you have noticed a mistake in your car insurance policy document, it is important to take action as soon as possible to correct it. Here are the steps you can take to rectify the mistake: Contact your insurance company: Contact your insurance agent or the customer service department of your insurance company and inform them of the mistake. Provide them with the policy number and a copy of the incorrect document. Explain the mistake: Clearly explain the mistake that you have found in the policy document, and ask for it to be corrected. Request a corrected document: Ask for a corrected policy document to be sent to you as soon as possible. Check the corrected document: Once you receive the corrected policy document, carefully review it to ensure that the mistake has been corrected. Keep all records: Keep a copy of the corrected policy document for your records, as well as any correspondence with the insurance company regarding the mistake. It's important to address any mistakes in your policy document as soon as you notice them, to ensure that your coverage is accurate and that you have the protection you need in case of an accident or theft.

What will happen to the car insurance policy if I sell my car?

When you sell your car, the car insurance policy will no longer be valid as it is tied to the vehicle and not to the person. You will need to cancel the policy and if the new owner wants to insure the car, he will have to purchase a new policy. Here are the steps to take when selling your car and cancelling your car insurance policy: Notify the insurance company: Contact your insurance company and inform them that you are selling the car and that you would like to cancel the policy. Provide them with the details of the sale, including the date of the sale and the name and contact information of the new owner. Return any unused premium: If you have paid for your policy in advance, you may be entitled to a refund of any unused premium. Transfer any unused No-Claim Bonus(NCB): Some insurance companies allow policyholders to transfer the NCB to the new policyholder, so you should check with your insurance company about this. Transfer the policy to the new owner: If the new owner of the car wants to continue insuring the car, they will have to purchase a new policy. They may be able to transfer any NCB from your policy to their new policy. Get a release letter: Before transferring the car to the new owner, it's important to get a release letter from the insurance company which confirms that the policy has been cancelled and that there are no outstanding claims. It's important to cancel your policy as soon as you sell the car to avoid any unwanted charges or coverage lapses. Additionally, it is important to ensure that the new owner has their own valid insurance policy in place before they take possession of the car.

Does car insurance cover scratches, dents and cosmetic damage?

Yes, your car insurance will cover the cost to repair for dents, scratches and cosmetic damage, if the insured individual holds a comprehensive or standalone own-damage car insurance policy.

What are the risks covered by the comprehensive car policy?

A comprehensive car insurance policy is a type of car insurance that covers a wide range of risks associated with owning and operating a vehicle. Some of the risks that are typically covered by a comprehensive car insurance policy include: Liability: Comprehensive car insurance policies provide liability coverage, which covers the cost of damages that you may cause to another person's property or injuries that you may cause to another person in the event of an accident that is your fault. Collision: Comprehensive car insurance policies provide collision coverage, which covers the cost of repairs to your own vehicle in the event of an accident. This coverage applies regardless of who is at fault for the accident. Natural Disasters: Comprehensive car insurance policies provide coverage for natural disasters such as floods, earthquakes, and storms. Fire and theft: This coverage protects you from financial losses if your vehicle is damaged or stolen as a result of a fire or theft. Personal Accident Cover: It covers medical expenses of the driver and passengers of the car in case of an accident. Third-Party Insurance: Comprehensive car insurance policies also provide third-party insurance, which covers the cost of damages that you may cause to another person's property or injuries that you may cause to another person in the event of an accident that is your fault. It's important to understand that the specific coverage provided by a comprehensive car insurance policy will vary depending on the insurance company and the policy that you choose. It's a good idea to review the policy document carefully and ask any questions that you have to ensure that you fully understand the coverage provided by your policy.

Does car insurance cover passengers?

The passengers of your car can be covered under car insurance if you purchase a passenger cover.

Does a car insurance policy cover tyre damages?

Car insurance gives coverage to tyre and tube repair and replacement only in case the insured car has met with an accident. In simple terms, the tyre damages are covered only if the insured car is also damaged in the same accident or at the same time. This excludes tyre burst, normal wear and tear, and so on. However, the policy limits the coverage to 50% of the cost of replacement of tyres.

Will my car policy cover electrical fires?

The damage incurred due to an electrical fire can be covered by your car insurance if there is a provision in your policy.

Will my insurance company give coverage for an accident caused by someone else while driving my car?

Whether or not your insurance company will give coverage for an accident caused by someone else while driving your car will depend on the specific terms of your car insurance policy. If your policy includes coverage for "any driver" or "any person who drives the car with your permission," then it will cover accidents caused by someone else while they were driving your car. This coverage is also known as "permissive use" coverage. However, if your policy does not include this type of coverage, then your insurance company will not provide coverage for an accident caused by someone else while they were driving your car. It's important to note that coverage for permissive use is generally not included as standard coverage in most policies, and you will have to pay extra premium to get it included. It's also important to note that even if your policy includes coverage for permissive use, there may be certain restrictions or exclusions. For example, your insurance company may not provide coverage if the person who caused the accident was under the influence of alcohol or drugs, or if the person who caused the accident was not licensed to drive. It's always a good idea to review the terms of your car insurance policy carefully and ask any questions that you have to ensure that you fully understand the coverage provided by your policy.

Is the engine damage covered by car insurance?

Car insurance is designed to provide coverage for any damages the insured car's engine may sustain in the event of an accident. Engine damage brought on by wear & tear or mechanical failure, however, is not covered. You can upgrade your policy with engine protection to acquire this coverage.

Why do car insurance premiums differ from company to company?

The rates of car insurance vary from one insurer to another as every company uses a unique formula to estimate risk and determine the amount of premium and claim that it will pay during the policy year.

Why the premium of car insurance increases every year?

There are several reasons why car insurance premiums may increase each year. One of the main reasons is the rising cost of medical treatment and car repairs. As these costs increase, insurance companies may need to adjust their premiums in order to cover their expenses. Another reason for premium increases is an increase in the number of claims being filed. When more claims are filed, it can indicate that the insurance company is paying out more money, which can lead them to raise premiums to cover the cost. Additionally, changes in state laws, regulations and inflation also play a role in the premium increases. The frequency and severity of natural disasters, and the overall economic conditions can also affect the cost of insurance.

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Car Insurance FAQs

What is Car Insurance and why do we need it?

Car insurance is a contract between you and the insurance provider in which you agree to pay premiums in exchange for financial protection in the event that your car is stolen or damaged in an accident. The amount of protection you get from your car insurance policy is determined by the yearly premium you pay and the options you choose.

In addition to breaching the law by not having car insurance, if you are at fault in a car accident and don't have insurance, you are responsible for paying for the repair of both your car and the vehicle you damaged. In other words, car insurance protects you from paying the costs of the repair of your vehicle and the financial liability as a result of these unwanted events.

What are the Types of Car Insurance?

There are two types of car insurance that are available in the Philippines, these are (1) Compulsory Third-Party Liability (CTPL) insurance, and (2) Comprehensive insurance.

Compulsory Third-Party Liability (CTPL) Insurance

Prior to registering or renewing a vehicle, you must first obtain a “Compulsory Third-Party Liability (CTPL)” car insurance as mandated by the Land Transportation Office (LTO) for all motor vehicle owners. This type of insurance can protect you from certain liabilities if your car causes an accident that results in the death or bodily injury of a third party. One of the main reasons why this is needed is that pedestrians or any unsuspecting third-party victims are assured that they won’t be left without any aid if they get injured in an accident.
Comprehensive Car Insurance

Comprehensive car insurance policies have a higher yearly premium than CTPL since their coverage is broader, as the word "comprehensive" implies. A comprehensive car insurance coverage typically covers the car in its original state, excluding third-party accessories. You can, however, have your accessories declared under the policy, which will result in a higher annual premium.

How to get CTPL insurance and why it's necessary in the Philippines?

Every motor vehicle owner must have CTPL insurance before registering/renewing their car with the LTO in order to be protected from any financial liability for third-party caused bodily injury and/or death resulting from an accident involving their vehicle.

You can buy CTPL insurance online at a reasonable price (as regulated and standardized by the Insurance Commission). All you have to do is contact your preferred insurance company and provide the necessary documents:

Original vehicle receipt (OR)
Certificate of Registration (CR)
Driver's License
One government ID (aside from Driver's License)

Why should I get Comprehensive Car Insurance in addition to CTPL Insurance? What is the best way to acquire it?

Unfortunately, CTPL insurance only covers death or bodily injury to a third party, so you'll have to pay for your own injuries and automobile repairs. Having comprehensive car insurance provides top-up protection to cover those losses.

The inclusions on this policy, however, may differ depending on your car insurance provider. For example, theft coverage may be limited to the parts required for the insured vehicles to function correctly, as some insurance companies may refuse to cover stolen components or accessories found within the vehicle. If your car is stolen, you can be reimbursed for a set amount depending on its fair market value and depreciation.

When your car sustains damage that is not caused by normal use, such as a collision with another vehicle or being struck by falling debris, your insurance provider will shoulder the costs of repairs or replacement. If your vehicle is stolen or robbed, the same rules apply.

Another benefit of having comprehensive car insurance in the Philippines is that it can protect you from very costly obligations, especially if you hit a pedestrian or damage property such as other cars. Rather than paying for these costs out of pocket, car insurance allows you to file a claim with the insurer for your own damage, subject to the limits of your policy.

In the case of natural disasters which are beyond human control, there is an inclusion of coverage that is known as “Acts of God” or “Acts of Nature”. Natural disasters such as earthquakes, floods, typhoons, tornadoes, hurricanes, hail, tsunamis, or wildfires can cause damage to your automobile. This kind of inclusion is extremely beneficial, especially in the Philippines, where natural calamities are often.

What are the add-ons to avail on top of my CTPL or Comprehensive Car Insurance?

Normally, car insurance providers advise you to consider availing add-ons not covered by CTPL or Comprehensive Car Insurance. These include:

Acts of God/Nature – provides financial protection in case your car was damaged due to fortuitous events such as floods, typhoons, earthquakes, and other similar natural disasters.
Personal Accident Insurance - financially protects the driver and passengers from injuries or death in the event of an accident.
Roadside Assistance - is typically an extra service that is optional but offers peace of mind in the event that you breakdown or require towing.
Voluntary Third Party Liability – regular CTPL on covers up to ₱100,000; you may opt to avail this add-on to provide financial security for indemnities beyond this limit.

Can I get insurance for my old second hand car?

You can get insurance for your old second hand vehicle. But take into account these few tips:

Most car insurance providers only offer coverage for vehicles up to ten (10) years old ; anything older than that is not insurable, but some may still do so at a higher premium.
It is more likely that an insurance application won't be granted for any vehicle whose repair costs exceed its market value. When it comes to older vehicles, it is difficult on the part of the insurance provider to find any replacement for the parts that are not readily available on the market, making it too expensive for them.
If you own a desirable classic or vintage car, your insurance premium will be higher, and you might need specialized coverage for this kind of vehicle.

Despite the aforementioned limitations, you can always inquire with your preferred insurance provider about whether you can still insure your old used car.

How to file a car insurance claim?

In the event of getting involved in an accident, you must secure necessary documentation to support your car insurance claim:

Take clear pictures of the accident, paying close attention to the damaged area of the involved cars
Prepare documents including:

Original Receipt (OR)
Certificate of Registration (CR)
Driver’s License
Your insurance policy

Though not always necessary but securing police report may help expediting your insurance claim
Third party’s contact information and driver’s license

The aforementioned documents are what you need to begin a claim; additional documentation may be required in the event of hospitalization or death.

How to renew a car insurance?

Depending on the policy and the insurance provider, a car insurance coverage in the Philippines typically lasts one year. To avoid inconvenience and to always be protected financially, car owners must renew their car insurance by contacting with the insurance provider on time (better two months before expiration). Moreover, when you renew your car insurance, you'll be able to make changes to your existing policy or decide to switch insurance companies.