Car insurance for used vehicles: What Filipino drivers need to know

Have you purchased a used car or planning to buy one in the near future? Regardless of the circumstances, it remains essential to obtain suitable coverage for your new or pre-owned vehicle. Don’t make the mistake of skipping insurance just because it is not a new car; remember, new or used insurance is a must.

Many times, used car buyers ask us, "Is buying insurance for our used unit worth it?" And the answer is a cent-pencent YES. Whether it's an old hatchback, a two-year-old SUV, or a sports/luxury sedan, insurance is essential to keep you, your passengers, your car, and others on the road safe.

Furthermore, car insurance in the Philippines is not merely a choice, but a legal requirement (at least in part). Every car owner in the country needs to get Compulsory Third-Party Liability (CTPL) insurance, which is required for vehicle registration at the LTO and to drive around legally.

Beyond the CTPL, comprehensive insurance provides peace of mind and extensive coverage.

In this article, we’ll discuss all about used car insurance in the Philippines, so let's get started.

Used car insurance: Why it matters

Let us start by discussing some of the crucial benefits of insuring a second-hand vehicle, which include the following: financial protection against repair costs & medical expenses, peace of mind as you are legally compliant & protected, coverage from theft and natural calamities.

While all the above points explain the worth of used car insurance, there are a few common misconceptions that need to be cleared. This includes -

Used car insurance is not necessary because of the car’s low value
Insuring a used car is expensive compared to its actual worth

However, the truth is accidents and natural disasters spare no one, and with adequate coverage, you can save thousands of pesos on car repair and medical expenses.

Also Read: Top 5 mistakes people make when buying car insurance in the Philippines

Car insurance coverage for used cars

While there are several insurance coverage options offered to car owners, here are a few recommended options for used car owners -

CTPL Insurance - Required by law, it is an essential prerequisite for vehicle registration. It covers third-party injury or death. It is a must-have unit too.

Comprehensive Insurance - Optional but highly recommended, it provides broad protection, including coverage for theft, collision, fire, and vandalism. For used units that are high in value or comparatively new, it is beneficial.

Personal Accident Coverage - Accidents can happen anytime, to anyone, whether it's a new or used unit. This coverage is recommended for car owners who live and drive through high-traffic and accident-prone areas. It offers medical expenses and accidental death benefits to drivers and passengers.

Acts of God Coverage - The Philippines is prone to natural calamities such as floods, typhoons, and earthquakes. This coverage is recommended for car owners residing in areas that pose such risks.

Also Read: Top 10 must-have car insurance add-ons for Filipino drivers

Guide to buy used car insurance

Photo from Freepik

Let us now take a look at a few essentials for buying used car insurance in the Philippines, including the required documentation, inspection process, and other details.

Documents required -

Valid ID of the vehicle owner
Vehicle OR/CR
Deed of sale (if it’s a newly bought second-hand car)

Inspection requirement -

Several car insurance providers require a thorough car inspection or request photos of the used vehicle before issuing insurance. Many have strict eligibility criteria as part of their application evaluation process, which includes factors such as the used car’s age, condition, modifications, history, and repair costs. Note, these factors (along with the coverage inclusions) also play a significant role in determining the premium.

Let us understand each in detail -

Age	Cars below 10 years old enjoy easy insurance coverage accessibility Vehicles over 10 years old are generally charged a high premium
Condition	Insurers give preference to pre-loved units that are in good condition - no significant wear & tear or mechanical issues.
Repair cost	Used cars with no accident record or little/no significant repair history are preferred.
Modifications	Certain modifications are not covered under standard car insurance plans.
History	Insurance providers prefer a car with no record of traffic violations or accidents.

Step-by-step process

Step 1: Search for ideal coverage
Start by assessing your car insurance requirements. This can be done by evaluating your driving habits, the car’s age, and the location. While comprehensive insurance is highly recommended for its high coverage, consider adding optional add-ons like Acts of God and roadside assistance if you travel/live in flood-prone areas or isolated locations with limited mechanical aid nearby.

Step 2: Compare quotes
Once the insurance requirements are sorted, it is time to compare quotes from multiple providers and select the most appropriate plan that’s in your budget. Here you can utilise online quote comparison tools like Zen Insure.

Step 3: Prepare necessary documents & submit application
After selecting the insurance provider, inquire about the required documentation and start gathering all the paperwork. Please complete the used car insurance application form and submit it along with the required documents.

Photo from Freepik

Step 4: Get your policy
After thoroughly inspecting the application form, submitted documents, and the used vehicle, the insurer will approve your application and offer you an insurance policy. After receiving the policy, make sure to read the fine print and check the inclusions, exclusions, and details.

Step 5: Pay the premium
Ensure that you make the premium payment on time to avoid lapsing your policy.

Also Read: Car accident in the Philippines? Here’s the photo evidence you need for filing a claim

Top insurance providers for used cars

AXA Philippines
Malayan Insurance
FPG Motor Insurance
BPI MS Motor Insurance
OONA
eTiQa
Pioneer Insurance

Tips to save on premium on used car insurance

Drive safely: Some insurance providers offer discounts or rewards for an accident-free driving record.
Stay loyal: Long-time customers often benefit from loyalty perks, including reduced premiums.
Bundle policies: Consider getting all your insurance policies, like car, health, and life, from a single insurer. This will get you discounts.
Increase deductible: By opting for a high deductible, your premium can be lowered considerably.

Also Read: From confused to confident: Car insurance tips for first-time Filipino drivers

Bottom line

Car insurance is a must, whether you own a brand-new or pre-owned car. The law in the Philippines mandates that every motor vehicle owner obtain Third-Party Insurance, which offers protection against third-party bodily injuries or death in the event of an accident involving the insured car. This is a smart way to make our roads safer for pedestrians and other vehicle users. But what about the policyholders and their vehicle? Filling this coverage gap is comprehensive insurance and add-ons. However, when it comes to used cars, many wonder, Is comprehensive coverage essential? While it is entirely up to the car owner to decide on the scope of coverage required, we suggest opting for an optimal plan that shields you against financial risks on the road.

Used cars indeed cost less than brand-new units, but they are susceptible to theft, accidents, fire, and damage due to collisions or natural disasters. By obtaining the right policy, you can drive with peace of mind and confidence.

Also Read: How to switch providers when your car insurance is about to expire

FAQs

Q1. Do used cars require insurance in the Philippines?
Ans. All motor vehicles, whether new or used, are required by law to get CTPL insurance.

Q2. Is CTPL insurance enough for a used car?
Ans. CTPL insurance only covers third-party bodily injury or death. It doesn’t cover the driver or the car. If you need more protection, consider getting additional coverage.

Q3. I have a 10-year-old car. Is it recommended to get comprehensive coverage?
Ans. The decision depends on the level of coverage you want. However, it is essential to check if the provider offers comprehensive coverage for 10-year-old units.

Q4. Is car insurance transferable when buying a used car?
Ans. Car insurance does not get automatically transferred to the new owner. While the CTPL insurance is required to register the motor vehicle, the new owner must either get the existing policy transferred or purchase a new policy.

Q5. Do insurance providers inspect used cars before granting insurance cover?
Ans. Most insurance providers will inspect used cars, especially if the applicant requires a comprehensive policy.

Q6. What if my used car gets into an accident and it’s uninsured?
Ans. In this case, you’ll be liable for all the damage, repair, and medical expenses. If CTPL insurance is also missing, be prepared for potential legal liability and fines.

Q7. Do car insurance policies offer coverage against floods?
Ans. Only if your policy includes Acts of God coverage, as it provides financial protection against various natural disasters, including earthquakes, volcanic eruptions, floods, and typhoons.

Q8. Can I apply for car insurance online?
Ans. Many insurance providers these days are going digital, allowing applicants and clients to operate several functions online, including applying for insurance.

Q9. What documents are required to get car insurance for a used car?
Ans. To get car insurance for your used car, you need the following documents: OR/CR, a valid ID, a driver’s license, and probably a deed of sale.

Q10. Where can I compare used car insurance quotes in the Philippines?
Ans. You can check the quotes with local insurance companies, brokers, and through comparison sites like Zen Insure.

Q11. Do car insurance companies offer discounts on used car policies?
Ans. It depends on the insurance providers; some offer discounts for safe driving, bundling policies, or loyalty.

Q12. What is the difference between CTPL and comprehensive used car insurance?
Ans. The CTPL insurance covers used car owners against third-party bodily injuries or death. On the other hand, comprehensive insurance provides extensive coverage against theft, fire, flood, collision, and a range of different risks.

Q13. Is it possible to modify used car insurance?
Ans. Yes, insurance providers often allow policyholders to modify coverage mid-term or at the time of renewal.

Q14. I am selling my car. Can I cancel my policy?
Ans. Yes, you can request cancellation or transfer of the policy.

Q15. Are old cars cheaper to insure?
Ans. Not necessary. While old cars are generally low in value, insurers may limit the scope of coverage or increase the cost of insurance after a specific vehicle reaches a certain age.

Also Read: How to check your car insurance expiry date online and offline