Car Insurance: Why You May Need More Than Just CTPL

Compulsory Third Party Liability (CTPL) is the least amount of insurance you can get on a car. This particular type of insurance, which is a requirement before a vehicle can be registered, helps to cover for the hospitalization, physical injury, or death of a third party in a vehicle-related accident. This is all well and good, but CTPL doesn't cover the damages to the property of the third party, much less the damages to you and your car. Now the question to ask is: Do you need additional insurance?

The risk of having too little coverage

While doing your best to save money is admirable, don't forget why you are required to have insurance in the first place--it's designed to protect you and your finances in the event of a road mishap--particularly one that you caused.

Depending on the level of damage, having CTPL as your only type of coverage may not be enough. If you are held liable for the accident, your coverage could prove to be inadequate, and you may have to pay for all additional expenses out of your own pocket. And if your coverage is insufficient, it could bankrupt you.

How can you tell if you need more coverage?

A good way to gauge how much additional coverage you need is to take a look at your personal assets. If you're a single person that doesn't own any property of significant value, such as a house, a sizeable bank account, a trove of expensive jewelry, etc., then minimum coverage is fine.

On the other hand, if you have assets that amount to several hundred thousand pesos, you're going to need more coverage. Every accident is a potential lawsuit, and must take measures to protect your substantial assets from getting caught in the storm, thus you'll need greater coverage.

Make sure to choose the highest deductible you can afford

Insurance policies have a deductible, which represent the amount you have to pay from your own pocket before insurance covers any of the cost. Choose the highest deductible you can manage, because this will lower your premium significantly.

Once you've decided on the amount of coverage that's right for you, it's time to begin shopping for the most suitable auto insurance policy for your needs. Policies can vary widely depending on the provider, so make sure to do extensive research.