Finding the best car insurance in the Philippines

So you bought a new car and are looking forward to the days you will be driving it towards your workplace or an important appointment (a summer vacation, perhaps). However, you may be missing something in your vision of the future. Although we hope you will never encounter one, accidents to happen. Luckily, there are car insurance policies in the Philippines that can cover the cost during such unfortunate event. But how do you know that your car insurance has the best policy, premium and pricing that will suit your needs? Carmudi Philippines has compiled some of the most important tips when choosing a car insurance policy so you can have peace of mind once you hit the road.

Four major types of car insurance

Compulsory Third-Party Liability (CTPL) Insurance

The law requires that every car owner must at least have Compulsory Third-Party Liability (CTPL) insurance. It is also one of the requirements that the Land Transportation Office (LTO) asks new vehicle owners to organize when they are registering their car. To make it simple, having this type of insurance is mandatory. CTPL covers injuries the driver (or car owner) has caused to other people during an accident, including his or her passenger(s). It also takes care of your personal injury expenses but not the damage to your car. When you are involved in a collision with another vehicle, CTPL will not cover the damage to the other vehicle. A term related to this type of policy is the Voluntary Third Party Liability (VTPL)- Body Injury. Price range: PhP 950.00 (minimum required by LTO) to PhP 2,000.00 Insurance coverage: PhP 10,000 to Php 100,000 (depending on policy) When calculating the total amount you will have to pay, you usually deduct the claim amount from your policy’s deductible. For example, the claim is PhP 8,000 and you have a deductible of PhP 2,500- your insurance will have to pay for the remaining PhP 5,000.

Third-Party Property Damage Insurance

This is the cheapest type of insurance, with the exception of CTPL. Basically, it covers damages to a property (including other cars) if your car ever becomes involved in an accident. This, however, does not provide coverage to your vehicle. Third Party Property Damage is generally used for second hand vehicles that have a lower value than fair market price. If replacing your car will be cheaper than actually fixing the damage to it, this type of insurance will be good for you. For Third Party Liability insurance and the other two policies mentioned below, the price range and insurance coverage are assessed by the insurance company. Generally speaking, the price of your insurance policy will depend on the fair market (or assessed) value of your car. Malayan Insurance, for example, costs PhP 20,000 for coverage on a car that costs PhP 1,000,000. Price range: Quote Insurance coverage: Quote

Third-Party Fire and Theft Insurance

If you are not worried about ending up in an accident that will damage other people’s property, you may want to apply for this type of insurance policy. As its name suggests, third party fire and theft insurance covers your car if it is damaged by thieves or fire. Most car insurance companies also include the benefits of third party property damage to this policy. When applying for claims with this type of policy, you need to provide your insurance company some pertinent documents such as a police report, a damage assessment form, a certificate of registration, a official receipt and some pictures. Price range: Quote Insurance coverage: Quote

Comprehensive Car Insurance

This type of insurance has the most coverage out of the four major types of car insurance. Comprehensive car insurance covers more possible scenarios that may damage your car while maintaining the benefits of either or both the Third Party Liability (TPL) and fire and theft insurance. This is recommended for people who own luxury cars or owners who consider their car an investment. Some insurance companies also provide additional clauses such as Acts of God or Acts of Nature- some examples are floods and earthquakes. Others include add-ons such as your car being damaged when a riot erupts or if your car is damaged due to an unexpected event. Even the valuables inside your car (during the accident) and the car accessories you have installed are also insured. Price range: Quote Insurance coverage: Quote

Which type of car insurance is best for you?

When deciding which car insurance you should get, you may first want to look at several factors such as your residence (is it prone to flooding?), your driving habits (have you been involved in a road accident before?), the track record of the insurance company (based on customer feedback) and how much protection you actually need to protect your livelihood (if it is a commercial vehicle) or investment. The easiest way to do this is to actually talk to some of the insurance companies in the Philippines. Get different quotes from not just one or two, but as many as you can and compare what they are offering. Do not jump immediately because they are offering the cheapest policy or largest amount of coverage. Read the policy thoroughly (especially the fine print) and if you know an attorney consult with him first. Do note also that some insurance companies do not insure cars that are ten years of age or older. To know if you are dealing with a legitimate insurance provider check out if they are registered in the Insurance Commission of the Philippines (http://www.insurance.gov.ph/).