Early renewal vs. Last-minute renewal: Which is better for Filipino drivers?

Car insurance renewal - Basic understanding

What does renewing a car insurance policy mean? It simply involves extending the vehicle insurance plan for another year, which is typically the standard coverage period. This ensures that if the vehicle gets damaged due to an accident, collision, or theft, the owner is financially protected by the insurance company.

Car insurance renewal & car registration

In the Philippines, however, car insurance renewal is also linked closely to LTO car registration.

You see, like a car insurance policy, a car registration also requires renewal after a year. When renewing your registration, the LTO requires you to have a valid and active CTPL insurance.

Which car insurance policies can be renewed?

Here are the different types of car insurance policies that a policyholder can get renewed -

• CTPL (Compulsory Third-Party Liability) insurance: CTPL insurance is a legal requirement for every motor vehicle owner in the country. It offers limited coverage (for third-party bodily injuries or death) and requires renewal.
• Comprehensive insurance: Like CTPL, comprehensive insurance coverage also ends upon reaching maturity. To continue enjoying its benefits, which include coverage against damage to your vehicle, theft, fire, flood, vandalism, and other related events, you will need to renew it.
• Add-ons: Insurance providers offer several add-on coverages to owners that provide specific/customised protection, such as Acts of God, Roadside Assistance, and Personal Accident, among others. Renew it along with a comprehensive plan if you still require the specific protection.

How frequently should a policyholder renew their car insurance policy?

A car insurance policy in the Philippines typically lasts for a year (12 months from the date of initiation). This means that renewal is required annually, and, according to experts, it should be done a few weeks before the expiry date to avoid any lapse in coverage.

Also Read: Step-by-step guide to renewing your car insurance in the Philippines

Understanding early renewal

What is an early renewal? It indicates a situation where a policyholder renews the car insurance policy before its expiry date - typically, it happens two to four weeks before expiry.

Why is it preferred? Several Filipino car owners prefer early renewal to avoid last-minute stress and inconvenience.
Pros & cons of early renewal
Renewing your car insurance policy early has several perks and a few drawbacks as well. Let us discuss each one-by-one -

PROS -

CONS -

Understanding last-minute renewal

What is a last-minute insurance renewal? This one concerns a situation wherein the policyholder renews the policy just one or two days before expiry. This mainly happens due to Filipinos' busy schedules and budget issues.

Risk associated with the last-minute renewal

Here are the common risks that a policyholder faces for waiting till the last minute to renew their insurance policy -

• Lots of stress: Renewing a policy at the last minute brings a lot of chaos and rush, which is not an easy experience.
• Coverage gaps: In case you fail to renew your policy due to the last-minute rush, you’ll be left uninsured.
• Limited options: Going in at the last minute leaves you with no time to compare providers or even review the policy terms.
• High cost: Missed renewal could result in paying an extra fee for the re-application process.

When does it make sense?

It is hard to believe, but yes, sometimes waiting until the very last minute for an insurance policy renewal works in your favour. Here are the limited situations -

• Switching providers: When you're in the mood to switch providers, and have done your homework on your next provider. It is feasible to wait till the last minute.
• Selling the vehicle: If you plan to sell the insured vehicle, there is no need to look into another policy too soon.

Also Read: Expired Insurance vs. Cancelled Policy: What’s the difference?

Early renewal vs. Last-minute renewal

Now that we have a basic understanding of both early and last-minute renewals, let's conduct a one-on-one comparison.

Renewing car insurance - Best practices to follow

Here are a few practices a policyholder must practice when renewing their car insurance policy, as doing so doesn’t always have to be stressful or chaotic -

• Make it a point to mark your calendar at least two weeks before your policy expiry date to initiate the renewal process.
• Start by comparing providers based on quotes, coverage, customer service, and the claim process.
• It is essential to review your policy and ensure it meets your current needs.
• Do check for exclusive loyalty discounts.

Tips to remember the renewal deadline

The best way to remember your policy renewal date is to set up alerts. This can be done easily via phone reminders, marking Google Calendar, email notifications, and push alerts from the insurer.

Tips to save money

• Bundle coverages like acts of god, roadside assistance, etc
• Maintain a clean driving record
• Ask for loyalty discounts
• Try paying annually
• Compare prices

Mistakes to avoid

• Ignoring policy update
• Letting policy lapse
• Forgetting the policy expiry date
• Not comparing providers
• Going for a cheap policy, not going for value

Also Read: Top car insurance renewal FAQs in the Philippines

Bottom line

Car insurance renewal might seem like a tedious task, but the protection that you’ll lose by missing out will cost you dearly. So, one thing is for sure - Renewal is essential. Now, you can opt for early renewal, i.e., two to three weeks before the expiry date or last-minute renewal. As discussed above, it is clear that early renewal is a beneficial and more brilliant move for Filipino car owners. Why? Because it ensures peace of mind, provides enough time for reviewing policies, and eliminates coverage gaps.

This doesn’t mean last-minute renewal should be avoided altogether, as it could prove helpful when you want to switch providers or plan to sell the car shortly. In all other situations, last-minute renewal brings demerits such as high costs, excessive stress, potential penalties, loss of coverage, and limited options.

So, if you haven’t already set a reminder for policy renewal, do it now. This will ensure you stay legally insured and financially protected.

FAQs

Q1. How can I ensure I never miss a policy renewal?
Ans. It is not that difficult. Set digital reminders on your phone or Google Calendar, or sign up for automatic renewal notifications from your insurer. Furthermore, many providers offer auto-renewal options for added convenience.

Q2. How long does the policy renewal process take?
Ans. The online renewal process usually takes 10-30 minutes to complete. In-person renewal may take a few hours to a few days, depending on the completion of the documents.

Q3. Is there a link between car insurance renewal and LTO registration?
Ans. Yes. A valid CTPL insurance is required to renew your LTO vehicle registration.

Q4. Does renewal have any effect on the insurance cost?
Ans. It depends. At the time of car insurance renewal, your premium can increase or decrease depending on factors such as coverage changes, driving record, and claim history.

Q5. Can I cancel my renewal after paying?
Ans. It depends on the insurance and the policy terms. Some providers may allow you to do so, but may charge a minimal fee.

Q6. I got my car modified. Shall I inform the insurer?
Ans. Yes. Make sure to do so asap. Doing so will ensure that your coverage is adjusted according to the new changes.

Q7. What documents are required for policy renewal?
Ans. Typically, the following documents are required: a copy of the current policy, a valid driver’s license, and the vehicle’s original registration or certificate of title.

Q8. Do I need to renew CTPL and comprehensive insurance policies separately?
Ans. If your comprehensive policy includes CTPL insurance, you can renew both policies together. Please ensure that you request the Certificate of Cover for CTPL, as it will be required for the renewal of your registration.

Q9. Is it possible to renew the policy online?
Ans. Yes, of course. Many car insurance providers in the Philippines offer online renewal services, either through their own app or via third-party vendors.

Q10. Can car insurance providers be switched during the renewal period?
Ans. Yes. The car insurance renewal is an ideal time to compare different providers and consider a switch. Ensure that you opt for a provider offering the optimal package, one that balances both price and coverage.

Q11. How do I find my policy's expiry date?
Ans. You can check your policy’s expiry date on your insurance certificate and policy documents.

Q12. What is the best time to renew my car insurance policy?
Ans. Ideally, a policy shall be renewed two to three weeks before the expiry date. This is suggested to ensure you get the best deal.

Also Read: What happens when your policy expires? Renewal tips & reminders