When you register your car with the Land Transportation Office, you are required by law to get basic Compulsory Third Party Liability (CTPL) car insurance
to protect against possible liabilities to third parties. According to the Insurance Code of the Philippines, a third party is defined as any person other than a passenger, family member, or household member of the vehicle owner.
In other words, CTPL protects pedestrians from potential damages or injuries that arise from the use of the insured car. This is compulsory and covers any bodily injuries or deaths caused for of up to P100,000. However, CTPL does not cover loss or damages to property, and is very limited in this regard.
Many non-life insurance providers also provide comprehensive car insurance. Essentially, comprehensive car insurance has a wide coverage and insures you against damage, car
theft, liabilities caused by collisions, fire, malicious acts, acts of God (and nature) and personal accident insurance of the passenger. While this is not mandatory, it provides
some measure of financial security by covering car repairs and other damages should any unfortunate incidents occur.
It’s smart to get this type of insurance because risk is an everyday reality. Accidents can happen to you anytime, and if you’re driving to work every day, you’re exposed to risks that
you do not have direct control of. To illustrate, EDSA accommodates more than two million vehicles on a daily basis. If you take EDSA to work, you’re exposed to more than 27,000
public utility buses that figure in the worst traffic accidents.
Another good reason to get comprehensive car insurance is the fact that the Philippines endures an average of nine tropical storms in a year. It’s like saying your car is at major risk at least nine times in a year! I have a lot of friends who had damaged cars during the worst
flooding in Manila. Those who had Acts of God or Acts of Nature in their policy were well-taken care of by their insurance providers.
If any of these unfortunate incidents makes your car inoperable, comprehensive insurance picks up the tab for repairs and does all the legwork for you. So instead of doing the paperwork and trying to get them stamped at one government office after another, the insurance company will take care of all this. Depending on your coverage, they’ll even foot the hospital bills in case any passengers got injured in the accident.
When getting your car insurance, make sure that you read the fine print and understand what’s included and what isn’t. Many “comprehensive” insurance policies don’t insure against all types of damages, like riots or typhoons. Coverage for these instances will require additional clauses:
Acts of God or Acts of Nature covers damage from flooding and other non-manmade incidents.
Personal Accident provides a small amount for any injuries sustained during a road accident.
Medical Reimbursement lets you reimburse medical expenses from injuries related to the accident.
Other add-ons include riot (for protest or riot-related damage), upgrade (forupgraded car equipment), roadside repairs and towing.
Before including these add-ons to your coverage, determine how and where you use your car. For example, if you live in a flood-prone neighborhood, the Acts of God clause is worth paying for.
If you drive to work daily, it’s safe to include the Personal Accident or Medical
Reimbursement additions. Personally, I don’t mind paying a few thousand pesos more if my insurance provider rescues me during my time of need.