The term insurance can be overwhelming for many, especially for first-timers. Talking specifically about car owners, insurance is a must; there’s no way you can exclude yourself from the circuit. Why? Well, that’s because, as per government law, all motor vehicle owners must get CTPL (Compulsory Third Party Liability) insurance. In addition to this, there are many more aspects related to car insurance that you should know to enjoy better coverage and peace of mind on the road.
One such aspect is car insurance endorsements. This one is essential to understand by all Filipino policyholders as it can help them big time to get the proper protection and secure settlement when needed. In simple words, endorsements help you with two things: customise and rectify the policy. It is essential to ensure the insurance coverage fits your unique needs, lifestyle, and driving habits.
Interested in knowing more about car insurance endorsements - like meaning, types, and effect on premium? Then this guide is right for you; here we have discussed all about endorsements and more.
So, let’s get started, but first, a little about car insurance.
Car insurance in the Philippines - A little overview
What is car insurance, and why do you need it? Car insurance is an agreement between you and the insurance company wherein the insurance company offers coverage to you in exchange for the payment of a premium.
Furthermore, the coverage/protection offered by the provider becomes essential for Filipino car owners, especially given the unique challenges they face, including a high risk of accidents, heavy traffic, and flooding during typhoons. Absence of insurance will put a substantial financial burden on your shoulders, in case the car is involved in an accident or damaged due to collision or other reasons.
What are the car insurance coverage options available in the Philippines? Here are a few common coverage options providers offer: Compulsory Third Party Liability (CTPL) insurance, comprehensive insurance, acts of god coverage, personal accident coverage, and Third Party Property Damage.
Also Read: What to do if your car gets flooded (and will insurance cover it?)
Car Insurance endorsements - Definition and importance
What are car insurance endorsements? It is an official amendment to an insurance policy that may concern the addition or removal of coverage, or the correction of details mentioned. All to make sure the policy is updated and fits your needs.
Let us understand with an example - If you modify your car with the addition of an expensive accessory, endorsement will help ensure the item is declared and covered under the policy.
Endorsements vs Add-ons
Sometimes, policyholders confuse endorsements with add-ons. Let us clear the confusion. While endorsements refer to a change in policy, official shift in writing, add-ons, on the other hand, help to get additional coverage that suits your driving requirements.
Photo from FreepikTypes of car insurance endorsements
The table below discusses different types of car insurance endorsements in detail, from basic to advanced.
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Personal detail endorsements |
This includes changes (correction or updation) made to the policyholder’s name, address, phone number, or any other personal detail mentioned in the policy. |
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Minor vehicle detail endorsements |
This includes changes (correction or rectification) made to insured vehicle details like engine number, chassis number, registration number, and type of vehicle insured. |
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Complex vehicle modification endorsements |
This includes significant modifications to the insured vehicle, such as adding or removing electric accessories, changing the fuel type, and installing anti-theft devices. |
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Modification endorsements |
This includes changes or modifications done to the insured vehicle, exterior, interior and mechanical. |
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Coverage alteration endorsements |
This includes the addition or removal of insurance coverage in the policy. |
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Policy adjustment endorsements |
This refers to correcting/adjusting/changing policy details like mistakes in premium calculation, No Claim Bonus calculation, etc. |
When to consider getting an endorsement
It is to be noted that a car insurance endorsement is not for every Filipino car owner. However, under certain circumstances, it is a beneficial and practical choice. Let us discuss a few situations -
Change in ownership - When the policyholder transfers car ownership, an endorsement is required to reflect the new policyholder.
Change in vehicle usage or driving pattern - In cases where there is a shift in vehicle usage or driving pattern, it becomes necessary to raise coverage endorsements like theft protection, roadside assistance, and acts of nature. Or if you begin using the vehicle for commercial purposes.
After car modification - When modifications are done to the vehicle, be it major or minor, like installation of a high-end audio system, engine upgradation, alloy rims, etc. This will ensure optimum coverage for these modifications.
How to apply for car insurance endorsements
Let us now learn about the step-by-step guide to request a car insurance endorsement -
Step 1: Thoroughly review your insurance policy, check what’s included and excluded.
Step 2: Decide on the required endorsements; this would depend on the recent car modification, error in the current policy, or change in vehicle usage/driving pattern.
Step 3: Contact your insurance provider/agent; discuss the new requirements or typos/errors in the policy.
Step 4: Request specific endorsements and ask for required documentation.
Step 5: Submit all the documents and fulfil all the other requirements.
Step 6: Wait for approval. Once done, wait for the updated policy.
Also Read: Benefits of paperless car insurance in the Philippines
Documents required for car insurance endorsements
When seeking car insurance endorsements, the requirements vary depending on the specific type of need. However, there are a few standard requirements -
- Duly accomplished written consent from the policyholder is essential
- Car insurance policy
- Valid government-issued ID
- Vehicle’s Certificate of Registration (CR) and Official Receipt (OR)
- Proof of vehicle modifications
- Additional driver’s license (if requesting to name a new driver in the policy)
Photo from iStockCost & validity of car insurance endorsement
When discussing the cost of car insurance endorsements, we refer to their impact on the premium. Therefore, depending on the type of change or alteration, your policy’s cost will be affected.
Please note that the price of endorsements varies depending on the insurer, coverage, car model, and other factors.
What about validity? A car insurance endorsement mainly covers the policy’s entire lifetime, i.e., a year. However, there may be a few endorsements that extend up to an agreed-upon time between the provider and policyholder.
Also Read: What happens when your policy expires? Renewal tips & reminders
Advantages & disadvantages of car insurance endorsements
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Benefits of Endorsements |
Possible limitation of endorsements |
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Customised protection and endorsements ensure policyholders' insurance needs are taken care of. |
A high premium, each endorsement adds to the policy cost, which adds to your financial burden. |
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Peace of mind, endorsement ensures your policy is updated & free from error - ensuring claim is always approved. |
Coverage restriction, some endorsements, like the ones related to coverage, come with specific conditions that may not offer coverage at all times. |
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Financial security and endorsements add an extra layer of protection, ensuring you are always protected. |
Misunderstanding terms, too many endorsements mean several alterations in the policy, which sometimes lead to confusion and misunderstanding. |
Tips for choosing the proper endorsement
- Always assess your driving needs first, then make endorsement choices.
- Consult your insurance agent first, as they may rightly explain the benefits, costs, and other essentials.
- Make sure to compare endorsement packages from different providers; this may help you save money.
Bottom line
Do you want to customise or rectify your car insurance policy? If yes, then a car endorsement is a powerful tool to do so. It may sound a bit complicated at first, but once you get a handle on the basics, it is a smooth ride.
We live in a fast-paced world, where things change in a fraction of a second, and so can your insurance needs. Furthermore, for Filipinos, dealing with natural disasters is not an option but a reality. If your insurance policy does not cover this, a car insurance endorsement will provide the required coverage, i.e., Acts of God coverage.
Also, all the details mentioned in the policy must be correct and updated for the claim to be approved. Endorsement is the way to ensure that everything is fine. At the end of it, car insurance is all about protecting yourself and your finances. And if endorsement can make your policy stronger and reliable, then why not?
Also Read: Top car insurance worries Filipino drivers face - and how to fix them
FAQs
Q1. How can car insurance endorsements be explained simply?
Ans. A car endorsement is nothing but a written change in the insurance policy; this may concern the addition, removal or other modification in the coverage or other details.
Q2. Can multiple insurance endorsements be made within a year?
Ans. Though there is no limit to insurance endorsements a policyholder can make within a year, it is recommended to do it just once or twice a year, as frequent endorsements can complicate your records.
Q3. What is the process to request a car insurance endorsement?
Ans. Just contact your insurance provider and provide all the required details and documents for the process.
Q4. What are the different types of car insurance endorsements a policyholder can raise?
Ans. Typically, a car insurance endorsement is categorised as follows: Basic and Advanced.
While the former looks after typos, modification of personal or vehicle details, the latter deals with the alteration and addition of insurance coverages.
Q5. How much do car insurance endorsements cost a policyholder?
Ans. The cost of a car insurance endorsement (effect on premium) depends on whether it is a non-payment or payment-related endorsement. Usually, endorsements that impact your premium, including adding an add-on, transferring ownership, and changing fuel type, require payment. However, address changes, corrections of typos, and updates to contact details do not affect premium.
Q6. I have comprehensive coverage. Do I still need endorsements related to coverage?
Ans. Comprehensive coverage offers wide coverage; however, endorsements can tailor the coverage to your needs.
Q7. Is it possible to request an endorsement anytime during the policy term>
Ans. Yes, however, the approval is subject to your insurance provider, who will review the additions/alterations.
Q8. Can I cancel a car insurance endorsement?
Ans. Mostly yes, and you need to make the endorsement cancellation request in writing.
Q9. How long does it take for an endorsement to come into effect?
Ans. The process is usually quick; after the submission and payment, the endorsement comes into effect in a few days.
Q10. Are endorsements legally required?
Ans. No, they are optional; however, endorsements concerning the addition of Acts of God coverage or rectifying a key detail are highly recommended.
Q11. What will happen if I do not disclose modifications made to the car before requesting an endorsement?
Ans. In such a case, your provider will deny claims concerning undisclosed modifications.
Also Read: Car accident in the Philippines? Here’s the photo evidence you need for filing a claim
