What's not covered under your car insurance policy?

It is a fact that getting car insurance is a must after buying a car in the Philippines. It not only offers the owner peace of mind but is also legally required by the government (at least the CTPL insurance). However, here’s the catch: getting insurance does not mean you are covered against everything or every risk. Sadly, many car owners discover this harsh reality only after filing a claim and getting it denied. Therefore, it is essential to understand policy exclusions and avoid unpleasant surprises or financial stress.

In this article, we have discussed in detail the exclusions of a car insurance policy in the Philippines. So, the next time you file a claim, you are prepared for the outcome or better arrange funds to repair the car.

Car insurance in the Philippines

Before moving on to what is not covered in your insurance policy, let’s first clarify what is included. Starting with Compulsory Third Party Liability (CTPL) insurance, it covers bodily injuries or death of a third party caused by your vehicle. What CTPL does not cover is damage to your vehicle and injuries to the car owner/driver.

Comprehensive car insurance offers broader coverage than CTPL—it covers theft, accidents, fire, vandalism, and more. However, the fact is that it too has limits, and that’s where exclusions kick in.

Car insurance policy exclusions

Suppose you think that getting a CTPL and a comprehensive insurance pack will offer you all the required protection. In that case, we are sorry to say you couldn’t be more wrong, as several scenarios remain uncovered by the insurance policy.

Driving under the influence	In case the accident takes place while the driver is drunk or under the influence of an illegal substance, your claim will most definitely be denied.
Mechanical or electrical breakdown	Issues related to engine failure, electrical faults, battery issues, manufacturing defects, or poor maintenance are the car owner's responsibility and are therefore not covered.
Wear & tear	Over time, every vehicle shows signs of aging, such as faded paint, rust, and worn tyres. If an accident occurs due to normal depreciation, your provider won’t cover it.
Pre-existing damages	Insurance providers do not cover damage such as scratches or dents that existed before the policy began.
Using a private car for commercial purposes	Some car owners act too boldly and use their private vehicles for commercial purposes without informing the insurance provider. Accidents that occur during such activities are not covered by an insurance policy unless specifically covered.
Unauthorised or unlicensed driver	Your claim will be invalidated if, during the accident, the car was driven by an unauthorised or unlicensed driver.
Reckless driving or racing	If the accident occurs during an off-road event or race, the insurer is unlikely to honour the claim.

Also Read: Why should you avoid making small car insurance claims in the Philippines?

Top reasons for car insurance claim denial

Claims get rejected for several reasons apart from policy exclusions; here are a few procedural mistakes that lead to denial -

• Proving false information or misrepresentation of facts. Lying about who was behind the wheel and/or the reason behind the accident may lead to a denial of the claim. This could even lead to cancellation of the policy under the charges of fraud.
• Delaying reporting of the incident to the insurance provider may result in a claim denial. Make it a point to report the matter within 24 hours.

Tips to avoid claim rejection

Here’s how you can make sure to avoid unexpected car insurance claim rejection -

Keep proper records and documentation: It is advisable to keep receipts, photos of the incident, the police report and other essential documents safe. This will ensure a smoother and faster claim process.

Understand your policy in & out: Before signing policy papers, make sure that you read the terms, inclusions, and exclusions carefully. Do not hesitate to ask questions, especially about the clauses mentioned.

Ask the right questions: It is essential to ask your agent the right questions at the right time. Some of the suggested questions include -

• Does the plan cover accessories like a dash cam?
• Does the policy cover flood damage?
• Will I be covered if I use my car for ride-hailing services?

Also Read: Why should you avoid making small car insurance claims in the Philippines?

Tips to ensure better coverage for your vehicle

Don’t just rely on traditional insurance coverage like CTPL and comprehensive plans. For a more overall sense of protection, invest in the following -

Acts of God/Nature coverage: It is well known that the Philippines is prone to natural disasters such as floods and typhoons. Therefore, getting Acts of Nature coverage is worth the extra cost.

Roadside assistance coverage: This plan is available during emergencies like flat tyres, breakdown, and fuel

Personal accident coverage: This add-on is essential for protecting you and your passengers in the event of an accident.

Bottom line

A car owner needs to be smart, safe, and informed about their insurance policy. The latter includes reading the fine print and knowing all the policy exclusions and inclusions. You see, it’s essential to understand what is covered and what’s not under your policy—to avoid expensive mistakes and denied claims. Therefore, in addition to reviewing the policy details, ensure you clear any grey areas and invest in add-ons based on your driving habits.

Remember, car insurance isn’t just about protection, but it’s also about preparedness against unforeseen events.

Also Read: Filing a car insurance claim? Here are the papers you must prepare