CTPL vs. Comprehensive Car Insurance: What’s the Difference?

A car owner must have a few things handy: car registration papers (OR/CR), a driver’s license, and an insurance policy. All these things together make you a responsible driver who is worthy of driving a car on public roads, taking care of your own and others' safety. While the LTO, i.e., Land Transport Office, takes care of the first two essentials, you have to work on the car insurance policy. This includes -

Searching insurance providers
Comparing quotes
Analysing insurance policy - inclusions and exclusions
Finalising the deal

While the points mentioned above give an overview of the process, in reality, there’s much more that needs to be done. In the previous article, we shared information on car insurance and why it is important for every Filipino driver. And today we’ll be moving a step ahead and discuss the two major types of car insurance policies in the Philippines - the CTPL (Compulsory Third Party Liability) and the Comprehensive insurance policy in detail, and compare them on different parameters. But first, let’s review car insurance in the Philippines, especially for those who have missed out on our previous blog.

Car insurance in the Philippines

A car insurance policy shouldn’t be confused with a mere piece of paper that is a prerequisite for new car registration or registration renewal of an old car. In reality, it will be your first line of defence in case of unexpected events involving car damage, accident, theft, fire, and vandalism. It doesn’t matter if you live in the hustling-bustling city of Manila or are in Palawan enjoying nature and its beauty, having a car insurance policy is a must. Also, it is required by law, so there’s no way out. When it comes to car insurance in the Philippines, two terms come across a lot, i.e., CTPL Insurance and Comprehensive Insurance. Both are part of the insurance system that offers protection, but they operate on totally different levels. To understand which one is apt for you becomes crucial to understand the two in detail. Furthermore, this detail will save you from last-minute headaches, unwanted opinions, and also help save your hard-earned money. So, without further ado, let us begin understanding CTPL Insurance and Comprehensive Insurance.

Understanding CTPL Insurance

CTPL insurance

CTPL stands for Compulsory Third Party Liability Insurance, and as can be judged by the name, it is a mandatory requirement for every car owner in the country. It is also the insurance that is essential for car registration at the LTO. Now, the question is, being a car insurance policy, what protection or coverage does CTPL offer? Well, to your surprise, a CTPL insurance does not offer any protection to your car. Yes, you read it right. This insurance primarily covers third parties, i.e., individuals who fall prey to an accident involving your car. Third-party can be a pedestrian, another driver, or passengers.

CTPL insurance coverage

As mentioned, CTPL insurance offers protection to third parties, but what kind of coverage are we talking about that’s important, as the remaining will come out of your pocket? So, let’s check out what CTPL coverage gets us - Coverage against - Third party injury and death; medical bills of the third party No coverage against - Damage to your car, theft, driver’s injury

Photo from Freepik

Why is CTPL insurance mandatory?

Yes, the CTPL insurance is mandatory in the Philippines. If you don’t follow along, not only will you be deprived of its coverage, but your car will not get registered with the LTO. And we don’t think we need to tell you that it's illegal to drive a car that is not registered; if caught, it could lead to a fine and penalties. But why was such a law created? Simple, to ensure a safety net for the public in general. To ensure that every time someone gets injured or dies in a road accident, they get their dues, regardless of whether the one responsible for the accident can pay the bills or not.

Consequences of skipping CTPL insurance

Even after knowing all this or otherwise, someone decides to skip CTPL insurance. Here is a list of things you should be prepared for -

You won’t be able to register your motor vehicle with the LTO.
If caught by authorities, you’ll be penalised (fines and penalties).
It could lead to the impounding of the vehicle.
No registration renewal for your vehicle.
In case of an accident, third-party liability will fall on your shoulders completely.

So, don’t even think of ignoring CTLP insurance, you won’t get anything by saving those few hundred pesos. Instead, you’ll end up inviting more trouble and expense.

Is CTPL insurance enough?

We often get asked if CTPL insurance is enough. We’d like to answer this question before moving on to the comprehensive insurance topic. So, you can skip the latter completely if you are convinced that CTPL insurance is all you need for you and your car. There are various scenarios where having CTPL insurance will suffice your needs for car insurance. Now. That’s when -

You rarely drive, and that too within a limited range.
You consider yourself a cautious driver, but feel it’s okay to take some financial risks.
You are just interested in meeting LTO car registration requirements.
You can’t afford a car insurance policy with a high premium.
You reside in a low-risk area when it comes to floods, theft, etc.

If you click any of their boxes, we’d still like you to remember that CTPL offers limited coverage. God forbid if you are in an accident, it’ll cost you so much more than what you are saving by not getting comprehensive insurance.

Understanding Comprehensive Insurance

When it comes to the comprehensive insurance policy, it goes way beyond the basic CTPL insurance - both in terms of coverage and premium. Unlike the CTPL, this one is not mandatory but still highly recommended. Why? Because it safeguards you and your car against a wide range of financial burdens and risks.

Comprehensive car insurance coverage

When it comes to coverage, comprehensive insurance packs a lot more. You can think of it as a super-deluxe protection pack for your vehicle. It offers the following coverage -

Collision coverage
Theft and carjacking protection
Acts of God (flood, earthquake, typhoon, etc)
Riots and strikes
Fire and explosions
Vandalism and malicious acts
Third-party property damage (often included)
Personal accident coverage

Wait, there’s more. Yes, some insurance providers offer sweet add-ons like towing service, roadside-assistance service, zero depreciation, key replacement, loss of use, and many more. Not every policy is the same, and neither are the inclusions and add-ons. Do prepare the policy papers thoroughly before accepting.

Is it worth the expense?

You are asking whether comprehensive car insurance is worth it. We’d say it’s vital, especially if you have purchased a brand-new expensive car, live in a flood-prone area, live or park in places that have a reputation for theft, want protection against natural calamities, and don’t wanna stress about accidental costs. In addition to the above-mentioned reasons, there are several benefits of getting comprehensive insurance -

Knowing that your car is covered from a wide range of threats, comprehensive insurance offers complete peace of mind to car owners.
With this insurance coverage by your side, you have a financial cushion against unexpected events like accidents, theft, etc.
It hikes your car’s resale value.

CTPL Insurance & Comprehensive Insurance

Photo from ETAUTO

CTPL & Comprehensive car insurance - Can a car owner have both?

If, after reading about the amazing benefits of comprehensive car insurance, you are wondering if you can have both CTPL and comprehensive, then the answer is yes. This is what is recommended. The duo will offer you complete coverage. Here are the key points to remember -

While CTPL is compulsory, comprehensive coverage is optional.
Comprehensive insurance does not replace CTPL; it just fills the gap.

CTPL vs. Comprehensive Car Insurance

Now that we have a brief about CTPL insurance and comprehensive insurance, let us compare the two on different parameters.

Feature	CTPL Insurance	Comprehensive Insurance
Mandatory	Yes, required by law	No, it is optional, completely at the car owner’s discretion.
Own car coverage	No, only offers third-party coverage.	Yes, it offers coverage for your car in case of an accident or damage.
Third-party injury/death coverage	It offers coverage against third-party injury/death.	Yes, it also offers coverage against third-party property damage.
Covers theft, fire, and natural calamities	No, no such coverage is offered.	Yes, it offers financial coverage in case your car gets stolen or damaged due to fire or a natural calamity.
Add-ons	No, add-ons are not available.	Yes, several add-ons are offered, like roadside assistance, towing service, etc.
Cost	Affordable, ranging from PHP 500 to PHP 800, for private cars.	Quite expensive at PHP 10,000 and going up as per the car’s price and other factors.

Bottom line CTPL insurance is a must-have in the Philippines. Car owners are legally bound to get it as it is mandatory for car registration and renewal. In terms of coverage, it offers limited coverage involving only the third party, which otherwise will fall on your shoulders. On the other hand, comprehensive coverage is optional but highly recommended for its complete protection against numerous threats. In short, while CTPL is the bare minimum, comprehensive is the full package; thus, the immense difference in the premium is significant. FAQs What’s the difference between CTPL and Comprehensive Insurance? CTPL only covers third-party injuries, while Comprehensive Insurance covers both your car and third-party damages. Can I drive my car without CTPL insurance in the Philippines? No, you are required by law to get CTPL to register and legally operate your vehicle. If my car gets damaged in an accident, will it be covered by the CTPL policy? No. CTPL insurance only covers injuries or death caused to third parties. How much does CTPL insurance cost? The CTPL insurance policy costs range between PHP 500 and PHP 800 for private cars. How much does the comprehensive car insurance policy cost in the Philippines? The comprehensive insurance policy is quite expensive. It costs between PHP 10,000 and PHP 100,000+ per year, depending on the car.