Car insurance add-ons in the Philippines: Myths, facts, and smart choices

If you have a car or are planning to buy one soon, then you need to know that insurance is a must - it is not only a legal requirement but a tool for financial protection. However, most Filipino car owners buy insurance because it’s required for the LTO vehicle registration, even though they don’t fully understand what the policy covers.

What does a basic car insurance policy cover?
While CTPL (Compulsory Third Party Liability) insurance is a must, it offers coverage against third-party bodily injuries or death. But a standard car insurance policy also includes a comprehensive plan that usually covers theft, own damage, and limited personal accident coverage.

Note that this basic coverage does not protect the car owner from every possible risk, and that’s where car insurance add-ons come in.

Why do optional coverages exist & how do they operate?
Optional coverages for car insurance enhance your policy. You can think of them as upgrades that help you customise your plan and address specific risks common in the country, for example, floods, accidents, and emergency roadside needs.

In this article, we’ll be discussing car insurance add-ons, focusing on the common myths policyholders have around them, so let’s get started.

Also Read: Difference between basic car insurance and add-ons: Insights for Filipino drivers

Car insurance add-ons: Meaning & purpose

What are car insurance add-ons?
Car insurance add-ons are optional coverage that a policyholder can purchase. They are designed to - fill coverage gaps, reduce out-of-pocket expenses, and offer peace of mind in high-risk situations.

For a car owner, it is essential to understand the myths and facts about car insurance add-ons. The result? You’ll be able to make smarter choices by understanding which upgrade actually makes sense.

Common car insurance add-ons

Most car insurance providers in the Philippines offer similar add-ons, though the names and limits may vary. Here is the list of a few popular add-ons -

Add-ons	Coverage
Acts of Nature (AON)	It is considered one of the most essential add-ons to car insurance. It covers damages like floods, typhoons, landslides, and earthquakes. Furthermore, given the country’s weather patterns, AON is considered a wise choice.
Personal Accident coverage	This coverage provides financial assistance if the driver is injured or dies in an accident.  It helps cover the following: medical expenses, disability benefits, and accidental death benefits.
Roadside Assistance	It offers help when your car breaks down. It usually includes services such as towing, battery jump-starts, flat tyre repairs, and emergency fuel delivery.
Loss of Use	If your car is out for repairs after an accident, this add-on ensures you are reimbursed for rental car expenses.  It basically offers a daily transportation allowance.
Auto Passenger	This coverage makes sure the passengers in your vehicle are protected. It provides coverage for medical expenses and accidental death benefits.

Also Read: Car insurance add-ons in the Philippines: Which ones are worth it?

Common myths around car insurance add-ons

Myth 1: Add-ons are just a sales trick
Reality: Add-ons exist for a reason, i.e., the limitations of a standard policy. These coverage options address real risks and not imaginary ones.

Myth 2: Comprehensive insurance is enough
Reality: This is one of the biggest misconceptions: comprehensive insurance still has exclusions, especially for natural disasters and passenger injuries.

Myth 3: Add-ons are expensive
Reality: Many add-ons cost only a small percentage of your total premium and can save you thousands of pesos in the future.

Add-ons facts every car owner should know

Fact 1: Add-ons fill coverage gaps in your policy
Without add-ons, a policyholder may pay out of pocket for expenses like flood damage, emergency towing, and passenger hospital bills.

Fact 2: Costs are small compared to potential losses
For instance, Acts of Nature coverage often costs far less than flood repair, which can run into the six figures.

Tips to choose the right add-ons

Tip 1: Consider your driving habits
When purchasing car insurance add-ons, ask yourself the following questions-

• Do you drive daily or occasionally?
• Do you often carry passengers?
• Do you travel long distances?
• Do you live in a disaster-prone area?

Tip 2: Assess environmental & location risks
If you live or work in a flood-prone area, such as Metro Manila, AON coverage becomes valuable.

Tip 3: Match add-ons with your budget
Remember, you do not need all the add-ons; choose only those that align with your lifestyle and financial capacity.

Also Read: Insurance for cars parked at home: Does it cover theft or fire?

Are car insurance add-ons worth it?

Car insurance add-ons are worth it for new cars due to their high repair costs. For older models, only essential coverage is required.

Which add-ons are suitable? Urban vs. Provincial driving

Urban driving	Provincial driving
Roadside assistance Loss of Use coverage	Acts of Nature coverage Personal accident coverage

Practical tips to follow when buying add-ons

Read the policy carefully: Make sure to read the policy thoroughly and check for factors such as coverage limits, claim requirements, and exclusions.

Ask the essential questions: Never hesitate to clear doubts with your insurer; get all the clarification you need.

Bottom line

By understanding car insurance add-ons, including their myths and facts, you can make an informed decision. Car insurance add-ons are neither expensive nor unnecessary - in fact, they are essential tools that protect car owners from real-world risks. By choosing coverages wisely, you can balance affordability with peace of mind. Thus ensuring that you, your car, and your passengers are ready for whatever the road brings.

Also Read: Defensive driving tips for Filipino drivers – Smart habits that pay off