Car insurance in the Philippines is mandatory before you go in for the registration for your car with the Land Transport Office (LTO). When your car is on the road, besides the driver, others who are at risk are the pedestrians or other property; usually known as the third party. Based on the car insurance coverage, there are six kinds of car insurance available in the Philippines
- Comprehensive Third Party Liability (CTPL)
This is an assurance to the general public that the owner of the car will pay compensation to the victim, for any bodily damage, death or property damage caused due to the negligence of the car owner. The CTPL under the law of the Philippines covers up to P100, 000, towards reimbursement of hospitalization cost. The Voluntary Third Party Liability covers the amount exceeding P100, 000.
- Collision Coverage
Irrespective of whether you are at fault or not, this policy covers the cost of repairing or replacement of your car. In case the cost of repair exceeds the value of your car, or it is totaled, the insurance company will replace your car, by the current market value of your car.
- Comprehensive Coverage
In addition to collision and CTPL, it covers your car from damage caused by other eventualities such as theft, vandalism, fire, animal damage, natural calamities and falling objects. This is comparatively costlier than other coverage.
- Medical Payment Coverage
This coverage pays the medical expenses of the passengers in the car, in the event of an accident, irrespective of who was at fault.
- Personal Injury Protection Coverage
This is an expanded form of the medical coverage. In addition to the medical expenses, it reimburses expenses related to funeral costs, loss of wages and childcare.
- Coverage Add-Ons
This covers special circumstances that are usually not covered by comprehensive insurance. It includes the following
- Loss of Use reimburses the transportation expenses incurred for not being able to use your car when it is under repair. You can even get transport service during this break-down period of your car
- Road Side Service includes reimbursement of cost for specific road side services such as roadside repairs, towing and fuel delivery. You can also avail hotel accommodation during certain incidents.
- Other Add Ons cover valuables inside the car and upgrade parts
There is a kind of participative insurance coverage which is known as car insurance participation fees. When you approach an insurance company for coverage of damages, cost or repairs or bodily injury, it asks you to ‘participate’ to bear a portion of the expenses, arising out of the insurance claim.
The objective of this participative arrangement is that the driver being a part of the accident bears a part of the cost as fine. Secondly, policyholders are deterred from making petty claims. Thirdly, fraudulent claims are prevented.
For your car, you are billed by the insurer, an amount equivalent to 0.5 percent of the total market value of your car, as determined in the participation fee.