Exploring essential add-ons for car insurance in the Philippines

Driving in the Philippines entails more than just cruising the streets; it's about responsible ownership. Responsible ownership means not only driving safely but also ensuring compliance with laws. In the Philippines, having valid car insurance isn't just a legal obligation; it's a shield for your finances against unforeseen events. Car insurance goes beyond legality; it covers damages, liabilities, and medical expenses arising from accidents, alleviating the financial strain of repairs and legal obligations. However, navigating the vast car insurance landscape can be daunting at times. Which coverage is optimal? Which add-ons offer the most value? How do you tailor a policy to suit your specific needs? These are essential questions deserving of answers. Let's explore further!

Selecting the right insurance policy

When it's time to select an insurance policy for your vehicle, it's crucial to assess various factors that can impact your coverage. You don't want to find yourself in a sticky situation without adequate protection. So, what should you keep in mind? First off, coverage limits, deductibles, and exclusions are essential to consider. Comprehensive coverage is the most popular option, as it safeguards against theft, natural disasters, and third-party liabilities. In contrast, third-party liability insurance is the minimum legal requirement, providing coverage for damages to others in accidents. Then come the add-ons, which further enhance the cover by offering very specific coverage. One should be wise to choose which one to opt for since every add-on comes with a price tag. Let’s check out the most popular car insurance add-ons.

Also Read: Compulsory Third-Party Liability Insurance (CTPL) vs. Comprehensive Insurance: What's best for you?

Top 10 car insurance add-ons in the Philippines

Zero depreciation: Zero depreciation is one of the most popular add-ons for car owners. Here, unlike in a typical comprehensive policy, the insurer gets a complete claim of the current market value of their car without any depreciation in cases of total loss or theft. That said, the upper cap is pre-decided and mentioned under the policy limits.

Acts of nature/acts of God: The Philippine­s often face natural calamities such as typhoons, e­arthquakes, and floods. This extra add-on feature in your policy boosts your car insurance­ to cover you against damages caused by any such natural disasters. Car owners must note that the precise incidents covered under acts of nature or acts of God often differ from one policy to another; therefore, it is advised to read the policy details carefully in the fine print.

Roadside assistance: Have you ever had a flat tire on a lonely highway? Roadside assistance serves as a safety net in such instances. This extra feature­ offers a range of service­s which can be broadly classified into three categories:

Vehicle assistance covers emergency towing, crane use to lift out a vehicle from a pit or similar, fuel delivery, tyre change, jumpstarting a dead battery, locksmith service, etc.

Personal assistance includes arranging alternative travel options, providing ambulances if needed, providing overnight hotel accommodation, etc.

Security assistance includes coordination with the local police and providing anti-carnapping services.

Remember, not all of these features are covered in every policy, so it's better to read the roadside assistance terms carefully.

Engine: Modern automobile engines are complex and costly to fix. Engine protection extends beyond average comprehensive coverage to safeguard your vehicle's engine in the event of mechanical or electrical issues. This can be a lifeline for older vehicles or those with a history of engine failure.

 

Accessories: Many car owners invest in aftermarket additions such as alloy wheels, sound systems, and spoilers. Unfortunately, ordinary comprehensive coverage may not include these add-ons. This is where the accessory cover comes in. It protects these additional features from theft or damage caused by accidents or covered risks.

Key replacement: Losing your car keys can be stressful and expensive. Key replacement coverage pays for the cost of replacing lost or stolen keys, remotes, and any locksmith fees incurred.

Personal belongings: Personal possessions are often excluded from standard comprehensive coverage. However, a few insurers offer this add-on to cover the cost of your personal belongings and the damage to your car in case of theft.

Loss of use cover: If your car is damaged in an accident and requires repairs, you might be left without transportation. Loss of use cover compensates you for daily expenses incurred on alternative transportation, like car rentals, while your car undergoes repairs within a specified period (as outlined in the policy).
Riots, strikes, and civil commotion (RSCC): With growing political and civil unrest in the country, a handful of insurance companies have started offering an add-on that covers the car damage caused by riots, strikes, or acts of vandalism during such situations.

Return to invoice cover: This add-on is similar to zero depreciation but is only available for new cars and only during the first year of purchase. With the return to invoice add-on included in your policy, you will be entitled to the total invoice amount refund, without the 5% depreciation deduction, in case the car is totally damaged. In addition to the original invoice refund, you will get the paid road tax and registration fee as a return. Car owners must note that this add-on cannot be claimed for minor damages and repairs.

Also Read: Exploring the types of car insurance claims Filipinos can file

How to select car insurance add-ons?

While car owners can be tempted to buy all the available add-ons, it is essential to prioritize them based on specific needs since each one comes at an additional cost.

Here are a few essential things that you must consider while choosing add-ons with your insurance:

Assess your requirements: Determine which possible risks you want to add coverage for, such as natural catastrophes, personal injuries, or car failures.

Understand the add-on options: Familiarize yourself with the numerous add-ons insurance companies provide, including coverage limitations, exclusions, and prices.

Cost-benefit analysis: Determine if the cost of each add-on merits the advantages it delivers and whether it fits within your budget.
Customize your coverage: Customize your insurance policy by picking add-ons that meet your specific requirements while providing comprehensive coverage.

Review the policy terms carefully: Read the terms and conditions of each add-on to understand its coverage extent, limits, and claim processes.
Seek professional advice: If you need clarification on which add-ons to select, speak with a certified insurance agent or broker who can provide tailored suggestions based on your needs and preferences.

Benefits of add-ons

360-degree protection: If you're looking for enhanced protection for your car, these add-on covers are the way to go. They offer a host of benefits that go beyond your basic insurance policy, giving you 360-degree protection against potential risks and uncertainties.

Option to customize: There’s no one size fits all formula when it comes to car insurance. Therefore, it is super beneficial when you get to customize your coverage to suit your specific needs and preferences, ensuring tailored protection for your vehicle and yourself.

Peace of mind: With add-ons, you can enjoy peace of mind knowing that you're fully covered against any eventuality. Whether it's an accident, theft, or any other covered incident, you can rest assured that you won't have to bear the financial burden alone.

Financial security: Add-ons provide compensation for damages, repairs, medical expenses, and other associated costs, ensuring that you're financially secure in the event of an unforeseen circumstance.

Moreover, add-ons like roadside assistance and rental reimbursement offer convenience and support when you need it the most. You won't have to worry about being stranded on the road or inconvenienced in any way. With these add-ons, you'll have access to assistance and support that you can count on.

Bottom line

Having comprehensive car insurance with add-on coverage is crucial for car owners in the Philippines to protect both your car and yourself from a range of dangers and uncertainties. Knowing the value of add-ons, looking into popular choices, and choosing the appropriate coverage for your requirements will allow you to drive with assurance, knowing that you're sufficiently covered against any unanticipated detours along the way. Enjoy the voyage, be cautious, and maintain your insurance!

Also Read: Choosing the right car insurance policy in the Philippines