Everything should work in order for a car owner in the Philippines. Confused? So, after purchasing a car, the owner needs to get insurance, LTO registration (OR/CR), and, of course, procure the driver’s license. All this will ensure peaceful driving without the fear of fines, penalties, or financial liabilities arising due to uncertain events like an accident.
While procuring an LTO car registration and a driver’s license is a straightforward task, car insurance is just the opposite. In the Philippines, obtaining CTPL (Compulsory Third-Party Liability) insurance is legally required, and the comprehensive coverage, though optional, is chosen due to its wide coverage. But what about the add-ons? Known to provide extra protection beyond CTPL & comprehensive coverage, add-ons are the extra cherry on the cake that only makes your policy better.
But, unfortunately, add-ons are not celebrated the way they deserve. Policyholders either skip them altogether or underestimate their value completely. Through this article, we aim to educate car owners about add-ons by dispelling all the misconceptions. This allows car owners to make informed choices and maximise the benefits of their policies.
So, without any delay, let’s begin …
Also Read: Complete guide to modified car insurance in the Philippines
Car insurance add-ons: Understanding the basics
What are car insurance add-ons? A car insurance add-on is the extra, optional coverage offered by the insurer to strengthen your insurance plan further. This level of protection is far beyond the basic policy (CTPL + Comprehensive).
For instance, while a comprehensive policy might cover damage due to accident or theft, with add-ons you get protection from natural disasters like floods & typhoons, get roadside assistance, and even personal accident benefits.
Do Filipino car owners require insurance add-ons? While it is a personal choice, applicants are often recommended to get insurance add-ons because risks like typhoons, floods, and road accidents are pretty standard. Here, the add-on will take up all your financial liabilities, leaving you tension-free.
Also Read: Top car insurance worries Filipino drivers face - and how to fix them
Common misconceptions about car insurance add-ons
Photo from FreepikMisconception 1: Add-ons are a luxury item in the insurance world; an unnecessary cost
Reality: Add-ons are not an optional luxury; they save policyholders thousands of pesos that would otherwise be spent on hospital and repair bills.
Misconception 2: Only brand-new cars require add-ons
Reality: Natural disasters or accidents spare no one, be it an old or a brand-new vehicle. In fact, old models benefit a lot from add-ons like roadside assistance, especially if they are prone to breakdown.
Misconception 3: Comprehensive insurance is enough
Reality: Sadly, that is not the case. Yes, comprehensive insurance offers extensive protection to policyholders, but there is a limit. Enter add-ons that offer customised protection to policyholders, filling the coverage gap.
Misconception 4: Add-ons significantly affect the insurance cost
Reality: We won’t deny that add-ons add to the premium; however, it is nothing compared to the financial protection they offer to the policyholder.
Misconception 5: Add-ons are included automatically
Reality: Assuming add-ons are included in your policy without verifying with the provider or agent can be a costly mistake. Usually, insurers sell add-ons separately, and you need to ask for inclusion.
Misconception 6: Acts of God coverage is not needed
Reality: The Philippines is a country prone to floods, typhoons and many other natural calamities, which damage and destroy several properties and cars each year. Thus, making Acts of God coverage a crucial add-on, especially if you live in a flood-prone area.
Misconception 7: Personal Accident coverage is over-hyped
Reality: Car accidents are a universal fact. They can happen to anyone on the road at any time; Even as you read this, countless road accidents are taking place. Personal Accident coverage helps during such distressing times by taking care of medical expenses and even offers financial support in the event of disability or death.
Misconception 8: Roadside assistance is a gimmick
Reality: A car is a machine, and machines tend to break down without warning. A flat tyre, a dead battery, an engine breakdown, and running out of fuel are just a few of the many things that can go wrong. Roadside assistance will help in such situations, making you feel confident and relaxed during such stressful times.
Noteworthy add-ons to include in your policy
Here are a few useful car insurance add-ons you could consider getting -
Acts of God coverage - Recommended for protection against natural disasters such as floods, typhoons, landslides, etc.
Loss of Use coverage - It provides compensation/reimbursement for transportation expenses (such as cab or taxi) while your car is being repaired after an accident.
Photo from FreepikRoadside Assistance coverage - It is recommended for the help it provides during emergencies, such as a car breakdown.
Personal Accident coverage - In case of an accident, it takes care of your (driver) and passengers' medical and hospitalisation expenses.
Legal Assistance coverage - Following an accident or collision, individuals may become involved in legal matters, which can be both stressful and financially draining. This add-on will help cover such legal expenses.
Also Read: Step-by-step guide to renewing your car insurance in the Philippines
Tips to choose the right Add-ons
- Access your driving route; for instance, Act of God coverage is recommended for provincial drivers and personal accident coverage for daily commuters in Metro Manila.
- Always compare insurance plans from multiple providers before renewing (with add-ons). This will ensure optimum coverage at the best price.
- Take into consideration your surroundings - check if it is a flood-prone area, enquire about the frequency of road accidents, and the availability of car repair-related help. Choose the add-ons accordingly.
Bottom line
Car insurance in the Philippines is mandatory by law, at least the Compulsory Third-Party Liability (CTPL) insurance. But we’d like to tell you that car insurance is not just a legal requirement; it is much more, offering financial protection to the car owner against several kinds of risk. Allowing a policy to have such extensive capabilities is not just comprehensive insurance, but also includes add-on coverages. However, there are a few misconceptions about add-ons that let policyholders skip them altogether.
Through this article, we have cleared the air around add-ons, helping policyholders see them as an investment rather than an expense. With the proper set of add-ons in your policy, you can save yourself from a massive financial setback in the future.
Also Read: Travel with peace of mind: Car insurance add-ons for road trips in the Philippines
FAQs
Q1. What are car insurance add-ons?
Ans. Car insurance add-ons refer to optional coverage provided by insurance companies to clients for enhanced protection. A few popular add-ons are Acts of God, personal accident, and roadside assistance.
Q2. Does comprehensive insurance include Acts of God coverage?
Ans. It depends on the insurance provider; while some offer it as a part of the comprehensive package, others may have listed it under the add-ons list.
Q3. Are add-ons necessary for a Filipino car owner?
Ans. The necessity of an add-on depends on the car owner's circumstances. For instance, if they live in or frequently drive through a flood-prone area, then Acts of God coverage is highly recommended. Overall, add-ons will cover expenses that CTPL or comprehensive insurance won’t.
Q4. I rarely drive, but do I still require car insurance add-ons?
Ans. Even if you rarely drive, it doesn’t completely take away the risk of car damage due to an accident, flood, typhoon, or theft. Here, you can consider going for add-ons like Acts of God and theft coverage.
Q5. Can we add coverage after purchasing a policy?
Ans. Of course, you can; most insurance providers allow policyholders to modify or alter their policy mid-term or at the time of renewal.
Q6. If I sell my car, will the add-on coverage be transferable to the new owner?
Ans. No. You see, a car insurance policy is registered under the owner’s name and in the name of the car. So, there will be no transfer; the new owner must apply for a new policy.
Q7. Is there a fine/penalty for late car insurance policy renewal?
Ans. It depends on your insurance provider’s policy terms. Some insurers do not charge a penalty but will lapse your policy, leaving you uninsured.
Q8. What if I do not renew my car insurance policy?
Ans. Not renewing your car insurance policy has severe consequences, including the expiry of the policy and the coverage offered, thus leaving you unprotected. Furthermore, without a valid insurance policy, you won’t be able to renew your car registration at the LTO.
Q9. How much do car insurance add-ons cost in the Philippines?
Ans. The cost of car insurance add-ons depends on the insurance provider and the type of coverage. You can expect a 10 to 20% hike in your premium with the inclusion of Acts of God coverage. However, add-ons like roadside assistance and personal accident coverage aren’t that expensive.
Q10. Can I check my car insurance policy inclusions, like add-on coverage?
Ans. Of course, you can do so in either of the following ways: reading your policy’s fine print, asking your insurance agent, or contacting the insurer’s customer service or helpline number.
Q11. Do old cars need car insurance add-ons coverage?
Ans. Yes. You see, natural disasters or a high-speed car don’t spare a car just because it's old. Also, old cars are more susceptible to breakdowns, making roadside assistance a must if you travel a lot.
Q12. What factors should I consider when buying add-ons?
Ans. It is recommended that a policyholder consider the following before buying insurance add-ons: location, lifestyle, and budget.
Q13. What will happen to my add-on coverage if my insurance policy expires?
Ans. Your car insurance add-ons automatically expire with your policy. If you want to enjoy the coverage continuously, make sure to renew the policy on time.
Q14. Do add-on coverages have any effect on No Claim Bonus?
Ans. No, your policy add-ons do not affect the No Claim Bonus. You see, the latter gets you a reward for going claim-free for a year.
Q15. Is roadside assistance coverage a good add-on for Filipinos?
Ans. Yes. Roadside assistance is a highly recommended add-on, as it offers help in cases when you require towing, tyre replacement, fuel delivery, or battery jumpstart.
