Bank vs. Dealer vs. Broker: Where to get car insurance in the Philippines

Car Insurance in the Philippines - Basics & current state

Before diving into car insurance service providers in the country, let us first analyse its current state. For starters, the Philippines' car insurance market, as expected, is experiencing significant growth, all thanks to increased vehicle sales and regulatory requirements.

However, compared to other Southeast Asian countries, the insurance penetration rate is relatively low. For instance, in the first quarter of 2025, it was only 1.89%, thus indicating a significant potential for growth in the industry.

Here are a few basic pointers about car insurance, to give you a heads-up on the tedious process you are about to begin -

• Car insurance is a vital aspect of vehicle ownership. It offers financial protection against unforeseen events such as accidents or theft.
• In the Philippines, having car insurance is a legal requirement.
• Compulsory Third Party Liability (CTPL) insurance is mandatory for all vehicle owners. It covers damages to third parties in case of an accident. So, just a basic level of financial protection for victims of road accidents.
• Comprehensive car insurance, on the other hand, is optional and provides more extensive financial protection. It covers a wider range of risks, including damage to the insured vehicle, theft, and natural disasters.
• The key difference between CTPL and comprehensive coverage lies in the scope of protection. While CTPL covers third-party damages, so low premium, comprehensive coverage costs more as it covers damages to the insured vehicle as well.

Common challenges of a Filipino car owner: Where to buy insurance

Now that you have a clear idea about the basics of car insurance in the Philippines, let’s talk about one of the most common challenges every Filipino car owner faces, i.e., understanding their insurance options and choosing the right coverage.

So, let’s begin with understanding the insurance options out there. Every Filipino has three options to buy car insurance -

• Banks
• Auto dealerships
• Online brokerage companies

Next challenge: Which of the following options will offer the best coverage, at the best price? Unfortunately, there is no exact answer to this problem, as each insurance outlet has its advantages and disadvantages. Therefore, you need to compare all three in terms of cost, convenience, coverage, and customer service, and find out which one best fits your needs.

Buying car insurance from a bank

Banks these days are offering insurance products, serving as a good alternative to traditional insurance providers. This way, they tend to expand their financial services and serve more clients.

How does it work?

In most cases, a bank partners with insurance companies to offer policies to their customers. This facility is often part of a package where the client has secured a car through a bank loan. This approach, where car finance and insurance are clubbed together, is appreciated by the customers, as both needs get managed in one place.

Major banks offering car insurance

Several banks in the Philippines offer car insurance facilities to their clients, including the Philippine National Bank, BPI, Metrobank, BDO Unibank, and PS Bank.

Insurance coverage and cost

The coverage and cost of bank-offered car insurance vary significantly depending on the bank, the insurance partner, and the policy.

In most cases, banks offer both comprehensive and third-party liability insurance, with the former covering damage to the vehicle, theft, and acts of god and the latter taking care of damages to third parties in an accident.

Advantages and disadvantages of purchasing insurance from a bank

Buying car insurance from banks has its advantages and disadvantages. Let us discuss both -

Pros :

• It offers convenience to the customers, as both their insurance and financing needs are met in one place.
• Assurance of partnering with reputed and well-known insurance providers.
• Flexible payment terms, as the premium gets included in the monthly loan instalment amount.

Cons :

• Limited range of products compared to specialised insurance providers.
• It might cost more compared to market rates.
• No or less customisation when it comes to coverage.

Verdict - Bank-offered car insurance is easy and secure; however, it might not be the most cost-effective option.

Buying car insurance from a car dealer

Auto dealers that sell cars also fulfil all your vehicle-related insurance needs. This one-stop convenience appeals to many car buyers in the Philippines.

How does it work?

When a customer buys a car from a dealership, the dealer offers insurance options as part of the sales package. This simplifies things to a great extent for the buyer, as two important transactions (purchasing a car and getting insurance) get completed at once with no additional effort.

Here, the dealer usually offers the customers several insurance plans from different providers. Customers can then compare and choose a plan that best suits their needs.

Added perk of car financing

In addition to insurance, auto dealers also offer car financing services to customers. Their partner financing institutions make it easier for customers to finance their cars. So, vehicle, finance and insurance - all needs get met in one go!

When to go for dealer insurance?

When a car buyer is looking for a hassle-free experience, in that case, dealer insurance is highly recommended. However, there are a few things to consider -

• Compare dealer and market insurance costs.
• Review the coverage details thoroughly.
• Understand the total cost, as dealers often earn a commission on the insurance products sold.

Advantages and disadvantages of purchasing insurance from a car dealer

Purchasing car insurance from the dealership itself while purchasing the car has its advantages and disadvantages. Let us discuss both -

Pros:

• Customers get to drive the car with an insurance policy in place.
• Insurance gets processed faster.
• Customers get to enjoy discounts and even free coverage in some cases.

Cons:

• Limited options, as dealers usually work with limited insurance providers.
• Dealer’s commissions usually hike the insurance cost.

Verdict - Car insurance from auto dealers is convenient, but the lowest price is not guaranteed.

Buying car insurance from brokers

Brokers are an essential part of the entire insurance landscape in the Philippines. They help navigate car owners through the complex insurance market and act as intermediaries between insurance companies and clients.

If you are someone with zero knowledge about car insurance (or insurance), it is best to get connected to a broker. Here’s why -

• They are experts who will help you find the most suitable insurance policy.
• They have extensive knowledge of the insurance market.
• They enjoy strong relationships with multiple insurance providers.
• They will get you a wide range of insurance options that you won’t find anywhere else.

How do brokers operate?

Thanks to their strong industry connections and skills to conduct thorough market research, brokers source multiple & most suitable insurance options for the client. The latter is done by analysing multiple policies based on policy terms, premiums, and the financial stability of the provider.

Their working process involves -

• Checking policy coverage and exclusions
• Comparing premium and payment terms
• Confirming the insurance provider's reputation and claim settlement ratio
• Analysing customer service

Advantages and disadvantages of purchasing insurance from a broker

Using a broker for car insurance offers several benefits and drawbacks, including -

Pros:

• Brokers take care of all the research and comparison related to policies.
• Clients get to benefit from brokers' in-depth knowledge of the insurance market.
• Brokers negotiate with insurance companies on behalf of the clients.
• Clients get assistance while filing a claim.
• Customisation of the insurance policy and full explanation of the fine print are provided by the broker.

Cons:

• Clients need to spend more time with the broker to get the best deal
• There is a risk of an unlicensed broker

Verdict - Car insurance brokers offer more flexibility and savings to the client; however, the process is a bit time-consuming.

Where to buy car insurance in the Philippines?

The answer to this question depends on you and your priorities. For example

• If you want maximum convenience and are okay paying a bit more, go with a bank or an auto dealer.
• Find a licensed broker if you want the best deal, better service, and custom choices.

Small tip before we conclude. No matter the source of car insurance, make sure the policy includes CTPL insurance, Comprehensive insurance, and Acts of God.

Bottom line

If you are out there to buy insurance for your beloved car, then you know how daunting this task can get, especially with so many options around. We have banks, car dealers, and insurance brokers - all offering distinct (but somewhat similar) insurance packages, each with its strengths and weaknesses. To make an informed decision, it is essential to understand each option and compare the insurance packages on offer. We’d recommend considering factors like coverage, premium, claim process, and customer service when selecting a car insurance provider.

It doesn’t matter what you choose - the convenience of a bank, the expertise of a broker, or the bundled services of a dealer, as long as the provider meets your needs at a competitive price.

FAQs

Q1.) Is it mandatory to have car insurance in the Philippines?
Ans. Every motor vehicle owner in the country must have Compulsory Third-Party Liability (CTPL) insurance, which is needed for vehicle registration with the LTO. Comprehensive car insurance, on the other hand, is optional, but highly recommended for financial protection.

Q2.) Is it possible to independently choose a car insurance provider if the car was purchased via a bank-approved car loan?
Ans. Yes, of course. A car owner has the right to choose his/her insurance provider, even if the car is financed through a bank loan. However, the bank sometimes requires the owner to meet specific coverage criteria.

Q3.) Is car insurance from auto dealers expensive compared to others?
Ans. Car insurance from auto dealers may cost you more. It is therefore recommended to always compare quotes from different sources (banks or brokers) before finalising the deal.

Q4.) Is it safe to buy car insurance from brokers?
Ans. Yes, but given that the car insurance broker is legitimate and licensed. Make sure that the broker is accredited by the Insurance Commission.

Q5.) How to make sure that I am getting the best price on car insurance?
Ans. For this, you need to do a thorough analysis. Start by acquiring quotes from the preferred bank, broker, and dealer. Next, compare the quotes based on premium, coverage, deductible, claim process, and customer service.

Q6.) Is it possible to switch my car insurance provider?
Ans. Yes. You can switch your car insurance provider anytime at your will.

Q7.) Do insurance providers conduct vehicle inspections before insuring the unit?
Ans. Several car insurance providers inspect the car before insuring the unit.

Q8.) What coverage is offered under a comprehensive car insurance policy?
Ans. A comprehensive car insurance policy in the Philippines typically includes theft, fire, acts of nature, bodily injury, and third-party property damage.

Q9.) Does car insurance cover damage from typhoons or floods?
Ans. Yes, but under the condition that your policy includes coverage against Acts of God.

Q10.) Does traffic have any impact on car insurance premiums?
Yes. Traffic conditions in urban areas like Metro Manila significantly hike the insurance premium. You see, congested roads increase the likelihood of accidents, which leads to higher claims, and therefore higher premiums for car owners.