Essential rights and duties every car insurance policyholder in the Philippines should know

Owing a car is one thing, but following the law to keep the vehicle, its owner & passengers, and others on the road safe is a must. This requires every car owner to have a clear understanding of their rights and responsibilities as a policyholder. Furthermore, this knowledge offers benefits such as fair treatment as a policyholder, a smooth claims process, and adequate protection in the event of an unfortunate incident involving the insured vehicle.

Did you know that most policyholders in the country are unaware of what they are entitled to and the responsibilities they must fulfil? In this article, we have covered everything, making it clear and straightforward.

So, without any delay, let’s get into the rights & duties of a car insurance policyholder…

Car insurance laws in the country

Let us check out some of the facts about car insurance laws that Filipinos must know -

• The Insurance Commission (IC) oversees the regulation of car insurance in the Philippines.
• Every motor vehicle must have Compulsory Third Party Liability (CTPL) insurance before the LTO registration.
• CTPL insurance offers basic protection against third-party bodily injury or death but does not cover the insured vehicle.
• To protect the vehicle itself, the owner needs Comprehensive Insurance.

Why is it important to know your rights as a policyholder?

When a policyholder is aware of their rights, it helps them avoid wrongful claim denials, unfair charges, and provider delays. In simple terms, knowledge empowers you to make wise decisions and avoid falling prey to wrongdoing.

Also Read: Don’t buy insurance without knowing these 10 key facts

Rights of a policyholder - A broad overview

Here is our personal take on some pretty rights of a policyholder -

Right to clear insurance policy information: Every policyholder has the right to have clear policy information. The insurer must provide information on coverage, exclusions, participation fees, and terms & conditions in simple, clear language.

Right to fast and reasonable claim processing: A policyholder has the right to fair treatment when it comes to claim processing. The claim application must be processed within the minimum required time frame, without any unfair extension.

Right to fair treatment: Every policyholder has the right to honest treatment from the insurance provider, with no pressure to accept unnecessary add-ons or unfair/hidden charges.

Right to data privacy and protection: Policyholders provide their personal and financial information to the provider in good faith, and the provider must protect it with no risk of data leakage.

Right to choose provider & accredited shops: Every car owner must be able to select their preferred provider and an accredited repair shop from the provided list.

Also Read: What's not covered under your car insurance policy?

Duties of a policyholder - Essentials to follow

After discussing the basic duties of a policyholder, it is now time to talk about the duties or responsibilities that must be performed without fail. All this will ensure an open and fair relationship between the two, insurer & insured.

Duty to provide accurate information: Every policyholder must provide truthful details to their insurer in both the insurance and claim applications. There should be fair and seamless communication between the two.

Duty to follow policy conditions: It is the duty of a policyholder to strictly follow the insurance policy terms and conditions, like proper usage of the vehicle, i.e., only for personal purposes with no commercial usage, and allowing authorised drivers only behind the wheel.

Duty to make timely premium payment: Insurance is a commitment between a provider and a car owner, wherein the latter promises to pay the premium as per the schedule in exchange for coverage. Otherwise, the policy will be cancelled or lapsed.

Duty to prevent misrepresentation: It is the policyholder's duty never to submit false documents or exaggerate the damage to the insured unit.

Duty to report incident at the earliest: Policyholder expects insurers to contact them as soon as possible after an incident. This allows them to send the adjuster at the earliest, evaluate the damage and initiate the claim process.

Rights vs. Duties

It is pretty simple; by knowing their rights, a policyholder can protect themselves, while knowledge of duties and responsibilities helps them maintain their coverage. In short -

• Rights ensure fair service, speed claim, and clear information
• Duties ensure your claim is honoured without any issue

Common issues faced by policyholders

In the Philippines, policyholders generally face common challenges that need to be addressed. The list includes -

Misunderstanding policy coverage limitations: Often, policyholders are under the impression that their policy covers it all - be it any damage, whatever the reason; however, in reality, that is not the case. Every policy has exclusions that need to be clearly stated and discussed.

Delayed & denied claims: Insurance claims that are not approved or processed on time are another major issue policyholders face. Delays usually occur when documents are incomplete; for denials, they occur when there is a policy violation, such as an unauthorised driver, drink-driving, etc.

Also Read: Insured Declared Value explained: How it affects your car insurance premium in the Philippines

Practical tips to maximise policy benefits

Tip 1: Read the fine print
Make sure to read the insurance policy paper thoroughly before finalising the deal. Check policy inclusions, exclusions, hidden charges, and terms. Doing all this will save you from any unpleasant surprises later.

Tip 2: Keep policy updated
In case there is any change in your personal details, such as address & contact number, or the vehicle has undergone any modifications. Make sure to inform the provider about the same.

Tip 3: Gather & submit all required documents
Ask your provider or agent about the documents required for filing a claim. Gather them all, check if they are updated, and submit them along with the duly accomplished claim form.

Tip 4: Review your policy annually
It is suggested that you review your insurance policy before renewing. As time goes on, your coverage requirements change as well.

Tip 5: Know the claim-filing process
It is a good idea to have a proper understanding of the insurance claim process - steps, documents required, etc.

Tip 6: Make sure to click proper pictures of the damage/accident scene
After receiving the required medical attention and notifying the local authorities & provider, make sure to click multiple images of the accident scene and the damage. This will help with the claim process.

Bottom line

Wanna feel empowered, make wise decisions, and avoid costly mistakes as a policyholder? Then we’ll say, get through with the fundamental and generic rights and duties of an insurer. You see, when you know what you are entitled to and what responsibilities you uphold, matters become crystal clear, and you, as a policyholder, feel confident. It equips you to handle accidents, policy renewal, filing a claim, and even updating the policy.

Remember, as a policyholder, you are entitled to peace of mind, fairness, and security on the road. But at the same time, you owe it to your provider the sheer fairness and promptness to make the process seamless.

 

Also Read: Most asked questions about car insurance participation fees in the Philippines — Answered!