Buying a used car? Don’t forget these insurance checks

Used car market in the Philippines

The used car industry in the country has grown rapidly over the past few decades. From online marketplaces to car dealerships and private sellers, second-hand car buyers now have several options to check available units.

But with ease comes risk; thus, it becomes important to be cautious.

Top reasons why Filipinos choose used cars

There are several reasons why used cars attract Filipino buyers -

Low purchase price: Used vehicles cost significantly less than brand-new units. This makes car ownership accessible to more families.

Slower depreciation: New cars depreciate faster in the first few years. Used cars have already experienced the biggest hit by depreciation.

Wider variety: Buyers can choose from a wide range of options, including older models that may no longer be available in the market and the latest models.

Lower insurance premiums: In many cases, insurance costs are lower for used cars because their market value has decreased.

Risk of skipping insurance verification

Skipping insurance checks can lead to serious issues, including -

• Hidden accident damage
• Previous insurance claims
• Expired or fake insurance policies
• Flood-damaged vehicles
• Difficulty in getting new insurance coverage

Bottom line, when buying a used car, don’t forget essential insurance checks - if you want to avoid expensive surprises.

Buying a used car? Don’t forget these insurance checks.

Before finalising your purchase, you should always verify the car insurance status. This step would ensure you know exactly what coverage exists and what needs to be updated.

Verifying the existing insurance policy

Ask the seller if the vehicle currently has an active insurance policy. Here is a list of important insurance-related checks -

• Policy expiration & renewal date
• Type of coverage
• Insurance provider certification
• Coverage limits
• Deductible amount

Tip: Request a copy of the insurance certificate and confirm its validity directly with the provider. This simple step prevents scams involving fake or expired policies.

Confirm the insurance transfer possibility

In some cases, the seller’s existing policy can be transferred to the new owner. However, not all insurers allow this. It is therefore recommended to verify the following -

• Whether the policy is transferable or not
• Is there a transfer fee
• What will be the updated premium rate

If the policy cannot be transferred, you’ll need to purchase new insurance immediately after the car’s ownership gets transferred.

Also Read: Smart parking habits that protect your car (and your policy)

Vehicle’s insurance claim history

A car’s claim history reveals a lot about its past, so it is essential to monitor it.

How do claims affect insurance premiums?

Vehicles with multiple claims often indicate previous accidents or repairs. Insurers may view these cars as high risk. Buying such pre-loved cars would result in the following insurance risks -

• High insurance premiums
• Limited coverage options
• Higher deductibles

Where to check claim records?

You can ask the seller to provide claim documentation or request verification via the insurance provider.
You can also review the vehicle’s service and repair records, which often indicate accidental repairs.

CTPL insurance: Verify its validity

In the Philippines, CTPL insurance is mandatory for all registered vehicles. Why? CTPL insurance covers injury or death of third parties caused by an accident involving your car. This coverage is required by the Land Transportation Office (LTO) to complete the registration process.

Without a CTPL, the car can’t be legally registered, so the owner won’t be able to drive it on public roads.

What if CTPL insurance expires? If the CTPL insurance policy has expired, you’ll need to purchase a new one before transferring registration to your name. Fortunately, CTPL insurance is relatively affordable and widely available.

Comprehensive insurance: Evaluating the options

While CTPL insurance is mandatory, comprehensive insurance is optional - but strongly recommended.

What does comprehensive insurance cover?

Comprehensive insurance typically protects car owners against -

• Collision damage
• Theft
• Fire
• Natural disasters
• Vandalism

Given the country’s exposure to typhoons and floods, comprehensive insurance seems extremely valuable.

Also Read: Car Insurance 101 for New Drivers in 2026: Basics you can’t skip

How does the used car value affect coverage?

One of the key factors that providers consider while determining premiums is the vehicle’s fair market value. While older vehicles usually cost less to insure, coverage limits may also be lower. It is therefore important to confirm the vehicle’s insured declared value (IDV) before purchasing a policy.

Vehicle’s insurable value

It is important to understand the vehicle’s value as it helps ensure you are getting the right insurance coverage.

What is fair market value?
It is the price at which the asset, in this case the car, would sell in the current market. Insurance companies use this value to determine premium cost and maximum payout for claims.

Why does accurate valuation matter?
If the vehicle is overvalued, you may pay unnecessarily high premiums. And if the value is undervalued, your insurance payout after an accident could be far too low.

Review deductible & coverage limits

Insurance policies always include deductibles and coverage limits.

What is a deductible?
A deductible is the amount you must pay before insurance coverage applies. For example, if your deductible is PHP 10,000 and the repair cost is PHP 40,000, insurance will cover PHP 30,000.

Choosing the right coverage level
Lower deductibles usually mean higher premiums, while higher deductibles reduce premium costs.

Tip: Choose a balance that fits your budget and risk tolerance.

Also Read: Car insurance expired? Act fast before you drive again in 2026

Hidden car damage that could affect insurance coverage

Hidden vehicle damage can impact insurance eligibility. Here are a few instances

Flood damage
Flooding is common in many regions of the Philippines. Flood-damaged vehicles may suffer long-term mechanical or electrical issues. In such cases, insurance companies may refuse coverage and charge higher premiums.

Accident history concerns
Cars that have been in major accidents may have structural damage. It is therefore recommended to always request a professional inspection before purchasing.

Compare insurance providers

Never accept the first insurance offer that comes your way. Here are some tips to compare quotes -

• Coverage inclusions
• Deductible amounts
• Claim settlement speed
• Customer reviews
• Recommended insurance companies

Here are some well-known insurers in the country -

• Malayan Insurance
• Pioneer Insurance
• Standard Insurance
• MAPFRE Philippines

Tip: Always request multiple quotes before deciding on a provider.

Consider add-ons for extra protection

Insurance add-ons provide extra coverage for specific risks. Here are some popular options -

Acts of Nature coverage

Given the Philippines’ frequent typhoons, this add-on protects you against -

• Flood damage
• Typhoon damage
• Landslides and more

Theft & personal accident add-ons

This additional coverage offers coverage against -

• Vehicle theft
• Driver & passenger injuries
• Roadside assistance

Remember, these optional coverages provide valuable peace of mind to the car owner.

Also Read: Downgrading your car insurance coverage: Smart scenarios when it actually makes sense

Insurance transfer procedure

Once you buy a pre-loved vehicle, you must update insurance ownership on time. Here are essential details to note -

Documents required

Typical requirements include -

• Deed of sale
• Vehicle registration
• Valid IDs
• Previous insurance policy

Transfer fees & timeline

Insurance transfer may take several days to process. Some providers charge administrative fees for updating ownership.

Tip: Always confirm the insurance transfer process before finalising your purchase.

Common mistakes to avoid when buying a pre-loved car

Many first-time buyers make avoidable mistakes like -

Skipping policy review: Never rely solely on the seller’s word. Always verify policy details with the provider.

Buying without coverage: Driving without proper insurance can lead to financial loss, legal trouble, and lots of stress.

Also Read: Why do two drivers with the same car pay different premiums?

Bottom line

Purchasing a second-hand vehicle is often considered a smart financial decision, but it requires careful due diligence. One of the most important steps many buyers overlook is verifying the car’s insurance status.

Remember the key rule, i.e., to never forget essential insurance checks. Taking time to review the vehicle’s policy, claim history, CTPL status, and insurance options - all of which can save you money later.

For Filipino used-car owners, insurance isn’t just a legal requirement; it is a crucial safety net against accidents, natural disasters, and unexpected expenses. By performing these essential checks before signing the deal, you can drive away with confidence knowing your investment is fully protected.

Also Read: Is your car properly insured for multiple drivers? Here’s what you should know

FAQs

Q1. Is insurance required when buying a used car?
Ans. Yes. Brand-new or used, CTPL is mandatory for all vehicles. It is, in fact, a prerequisite for registration with the LTO.

Q2. Can I transfer the previous owner’s car insurance to my name?
Ans. Some insurance providers allow policy transfers, but many require a new policy for the new owner.

Q3. How much does used car insurance cost in the Philippines?
Ans. There is no definitive answer, as used-car insurance costs vary depending on the vehicle’s value, age, coverage type, and insurer.

Q4. Is comprehensive insurance necessary for used cars?
Ans. While not required by law, comprehensive insurance is highly recommended for protection against accidents, theft, and natural disasters.

Q5. Can I change the insurance provider after buying a used car?
Ans. Yes. You can choose a provider that offers coverage suitable for your needs and budget.

Also Read: When your car insurance won’t help you - even if you paid on time!