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

Owning a car is enjoyable, as it allows you to travel and run errands at your convenience, while also conveying a sense of social status to the owner. However, all this comes at a cost, i.e., the cost of ownership and responsibility that extends beyond fuel and maintenance charges. We are discussing insurance - one of the most crucial yet often overlooked aspects of owning a motor vehicle.

While CTPL (Compulsory Third-Party Liability) insurance is mandatory and affordable, comprehensive insurance is optional but highly recommended. The optional comprehensive insurance, along with its add-ons, substantially increases the insurance cost, particularly in the case of the latter due to specific risk coverage.

Today, our focus is on car insurance add-ons and which ones are worth considering for Filipino car owners. So, without any delay, let’s begin ….

Car insurance add-ons: Basic understanding

What is a car insurance add-on? An add-on is an optional insurance plan that requires customisation of the policy according to the owner's driving habits, location, and budget. In short, an add-on converts your policy into a strong and personalised shield that offers protection from specific events you fear.

Key takeaways -

• An add-on coverage is attached to your base policy.
• It offers extra protection against events that the standard policy does not cover.
• Acts of Nature (AON) and roadside assistance are a few common examples.

Do car insurance add-ons really matter? In a country like ours, where motor vehicle owners face issues such as heavy traffic, unpredictable weather conditions, and high accident rates, a standard insurance policy often feels insufficient. Add-ons are recommended to fill coverage gaps that would otherwise remain unaddressed, potentially resulting in significant long-term costs. So, the answer is YES, add-ons matter.

Also Read: Car Insurance: Common inclusions and exclusions you need to know

Types of car insurance add-ons

Let us now discuss the most common car insurance add-ons offered by insurance providers in the Philippines.

Add-ons	Coverage
Acts of Nature (AON)	Considered one of the most essential add-ons for Filipino car owners, given the country’s geographical location, which invites natural calamities. The plan provides coverage against natural disasters, including floods, earthquakes, typhoons, and volcanic eruptions.
Roadside Assistance	This one offers essential services like fuel delivery, jump-starting, flat tyre replacement, etc., when you need them.
Personal Accident	This coverage protects the driver and passengers in the event of a road accident resulting in bodily injury or death. It offers financial assistance for medical or funeral expenses.
Riots, Strikes, and Civil Commotion (RSCC)	If you are living or travelling in an area known for strikes, riots, and civil commotion, then the RSCC coverage will protect your car against damage caused by such unsettling acts.
Loss of Use	This add-on provides a daily travel allowance or even a replacement car in the event the insured vehicle is under repair following an accident. Thus, minimising the inconvenience to a great extent.
Passenger Liability	If you usually travel with your family and friends, then it is a good idea to get them protected in case of an accident via this add-on coverage.
Accessories coverage	As the name suggests, this add-on protects the accessories in your car, such as the upgraded audio system, rims, and GPS. Note that the standard plan does not cover added accessories, so consider this option if you have already invested a significant amount in upgrades.
Towing & emergency services	While often bundled with roadside assistance, some providers offer towing & emergency service separately. It is highly recommended for car owners who frequently travel long distances or to less accessible areas.

Also Read: Passenger safety: What does your car insurance cover in an accident?

Car insurance add-ons: The worth-it ones

Now that we have discussed the different types of add-ons offered by insurance providers in the country, it is time to determine the ones that are worthy of your money. The fact is that this list would depend on certain factors, including your lifestyle, vehicle type, and location.

Most recommended add-ons include -

• Acts of Nature coverage; if your driving or residence is prone to calamities like floods, typhoons, etc
• Personal accident coverage; if you are a family man or a social bee, and need that peace of mind, which’ll only come after knowing your loved ones are covered
• Roadside assistance is essential for those who frequently drive, whether in urban or rural areas.
• Loss of use coverage; a must if you heavily depend on your car for work

Add-ons you can skip -

• Riot, Strike, and Civil Commotion (RSCC) coverage; not necessary unless you reside in a high-activity area
• Accessories coverage is not needed if you are not interested in modifications or upgrades to factory fittings

Tips to choose the right car insurance add-ons

The question is: How should a car owner choose the right combination of add-ons for their policy? The answer begins with having a clear understanding of one's driving environment and lifestyle.

Here are a few tips -

• Compare insurance packages, as some providers offer bundled add-ons at a discounted price.
• Access your car’s age and value, as new cars benefit more from specific add-ons.
• Evaluate your location, for instance, if you live in a flood-prone area, AON is highly recommended.
• Calculate the cost-benefit ratio to gain a precise understanding of the benefits and costs. For example, if spending an extra PHP 2,000 a year saves you PHP 20k in repairs, then go for it.

Cost of car insurance add-ons

What is the cost of a car insurance add-on? This is a common question policyholders ask, as every extra bit spent matters. It is a fact that prices vary from one provider to another and depend on several factors, including vehicle age, model, coverage, and location. However, the truth is that the cost of add-ons is way less compared to the protection offered.

Average add-on prices

On average, car insurance add-ons can increase annual premiums by 10 to 15%, so you can expect the estimated additional cost per year to be anywhere from PHP 300 to PHP 5000.

Car insurance add-on and claims

It is a fact that a car insurance add-on impacts a policyholder’s claim approval. You see, without the right add-on in your plan, the provider might reject your claim for excluded events. For example, if you do not have AON coverage, claims related to flood or typhoon damage will be denied.

What’s the claim process with add-ons?

The claim process will surely get faster and smoother, given that you have the right add-on coverage. However, each add-on requires specific attachments to strengthen your claim. For example, in the case of an Act of Nature, you need photos of the incident and/or a weather report.

Mistakes to avoid when filing a claim

• Not going through the policy fine print and not knowing the exclusions.
• Failing to report the incident to the provider and local authorities on time.
• Skipping submitting the required documents to the providers is essential for the claim process.

Top insurance providers with great add-ons

Here are some of the top insurance providers in the Philippines known for their add-on offerings. The list includes -

• AXA Philippines
• Standard Insurance
• Malayan Insurance
• BPI/MS Insurance
• MAPFRE Insurance

In addition to a wide range of add-ons, these providers are known for a quick claim process, nationwide roadside assistance support, and prompt customer service.

Also Read: Top car insurance picks in the Philippines; know which one is right for you

Tips to save money on add-ons

• Some banks or corporations offer discounts, while others offer free or discounted add-ons.
• Take advantage of the promo deals, as providers often offer significant discounts during peak seasons.
• Bundle policies for a multi-policy discount.

Bottom line

Getting a car insurance add-on isn’t just about spending more money on coverage, but adding a safety layer that is required and a significant investment. Given the country’s unique diving and weather conditions, add-ons such as Acts of God, Roadside Assistance, and Personal Accident become essential.

However, before opting for an add-on, it is essential to conduct some research so that you can make an informed choice. This includes understanding your vehicle’s needs, local risks, and lifestyle - thus ensuring maximum protection at a minimum cost.

Lastly, we’d like to emphasise that maintaining a balance between your requirements and coverage, both over-protection and under-protection, is crucial.

Also Read: Top 15 car insurance concerns in the Philippines—Answer

FAQs

Q1. What will happen if I don’t get an add-on?
Ans. While getting add-ons is not compulsory, it only strengthens your insurance plan. For instance, flood and riot damage aren’t covered without appropriate add-ons.

Q2. Which insurance providers in the Philippines offer a wide range of add-ons?
Ans. Providers like AXA, Malayan, and MAPFRE are known to offer flexible add-on options. Furthermore, they provide a fast claim process and 24/7 customer support.

Q3. Is Act of God coverage worth it?
Ans. Yes, given the high frequency of floods and typhoons, AON is considered one of the most valuable add-ons. It frees you from costly out-of-pocket expenses related to repairs due to natural disasters.

Q4. Does the law require car insurance add-ons?
Ans. No, in the Philippines, only third-party liability insurance is required by law. Rest assured, all plans, whether comprehensive insurance or add-ons, are optional.

Q5. Can you add or remove add-ons at any time?
Ans. Yes, most insurance providers in the Philippines allow clients to alter or modify their insurance plan at any time.

Q6. How much do car insurance add-ons cost in the Philippines?
Ans. Most add-ons cost between PHP 300 and PHP 5000 annually. However, it all depends on the provider, coverage, vehicle type, and location.

Q7. Do all insurance providers offer the same add-on coverage?
Ans. No, each provider is different in terms of the add-on plans offered and their associated costs. For instance, one provider may offer roadside assistance as part of a comprehensive plan at no additional cost, while others may charge a separate fee for it.

Q8. How can I compare car insurance add-ons online?
Ans. Use online comparison platforms to compare premiums, add-on availability, and policy inclusions & exclusions.

Also Read: Cheap car insurance: Smart savings or a costly mistake?