First-time car owners: What type of insurance do you need?

If you are reading this article, you have recently become a car owner, so congratulations. Now, you are looking for essential know-how and tips on everything related to car insurance, and guess what? Zeninsurance is the right destination. Here, you’ll find everything there is to know about car insurance, along with multiple services. Enough about us; let’s get back to the topic. Here’s something we’d like to clear straightaway, i.e., you can not skip car insurance, period. In the Philippines, every car owner, new or old, needs car insurance, at least the compulsory third-party liability (CTPL) insurance. The reason you ask, well, that’s because - Firstly, CTPL is essential for the LTO car registration, without which you cannot drive your car legally in the Philippines. Secondly, CTPL insurance offers protection against third-party injury/death, which makes the road safe for everyone, pedestrians and other drivers. In case you are completely new to the concept of car insurance in the country, we’d suggest you read our previous articles on car insurance & its importance, CTPL vs Comprehensive insurance, cost of car insurance, and much more. After reading all these articles, you’ll have a good grip on the subject, which will help you make better decisions. However, if you are not much of a reader and are looking for a to-the-point information source, this article is for you. So, let’s begin with the basics -

Car insurance in the Philippines

Excited to hit the road! We can understand the feeling one has after buying his/her first car, the excitement to go on a drive, take your friends and family around the city for a ride is something else. But first, take a pause and do the essential, i.e., get your car insured. As discussed above, it’s not a choice but a mandatory ritual. In the Philippines, you’ll most likely hear two terms around car insurance - CTPL insurance and Comprehensive insurance. There are other important things too, but these two are most likely to be opted for by every car owner. Why? Together, they offer financial protection against damages, accidents, theft, and more.

Photo from Freepik

Why insurance matters for first-time car buyers

Most first-time car owners consider insurance as another addition to the list of expenses associated with car ownership, which already includes the cost of fuel, service, repair & maintenance, tools, etc. However, what they don’t realise is that insurance is more of an investment that will bear them fruit when needed the most, i.e., during an accident, natural disaster, theft, or any other unfortunate incident involving the car. Overall, car insurance is crucial as it helps you with the following: pays massive hospital and medical bills, takes care of legal fees, car damage and repair, offers towing & road assistance service, etc. All this will assure that your mind is just on the road, with no worries. Lastly, as you know, you need it for registration.

Recommended & required car insurance

It is time to discuss mandatory and optional car insurance available in the Philippines. We’ll break each one down so that new car owners have a clear understanding. Let us begin with CTPL insurance. CTPL insurance is required by law, so it cannot be avoided at any cost by a car owner. It is an essential requirement for motor vehicle registration at the LTO, which is required to drive a vehicle legally in the Philippines. As for the insurance part, it offers protection against third-party injury/death caused by the insured vehicle. It should be noted that CTPL insurance is quite affordable and is not sufficient, as it does not cover the insured vehicle. Comprehensive insurance, on the other hand, is not mandatory but highly recommended for its wide coverage. Its scope extended to accidental damage, theft, fire, third-party property damage, riot, vandalism, and acts of nature. Add-on coverage is another option which a first-time car owner can opt for, which adds a layer of protection. Though they come at an extra premium, you can pick them as per your specific requirement and budget. A few examples include - Loss of use, roadside assistance, and personal accident coverage.

Factors to consider when insuring a new car

It is important to know all the car insurance coverage available, but other than that, a first-time car owner must also consider their budget, driving area, and car’s value.

To elaborate, make sure that you are comfortable with the monthly premium, as the default payment has consequences. Here you can drop the convergence options that are not suitable for your driving conditions.
We’d recommend that you scan your driving area, see what risks are involved, like floods, accidents, etc.
As for the car’s value, a new and expensive car is recommended to get comprehensive insurance, as repair costs can put a lot of financial strain on your pocket.

CTPL Insurance & Comprehensive Insurance

Photo from Freepik

Urban vs. rural insurance consideration

In addition to the three above-mentioned considerations related to car insurance, there’s one important factor to take into account, i.e., your location. For instance, if you live in densely populated areas like Metro Manila, where there is heavy traffic and parking issues, comprehensive insurance and add-ons are recommended, as you are more prone to accidents and car damage. Thus leading to a high premium. On the other hand, if you reside in the countryside of Batanes, Marinduque or others, your car insurance requirement should include protection against floods and car damage (due to poor road condition). Nothing much, so it might be cheaper compared to urban car insurance.

Where to get car insurance?

There are several well-known car insurance providers in the country, each with its own set of advantages and disadvantages. A few trusted names at the top of the list include -

Pioneer Insurance
AXA Insurance
Malayan Insurance
FPG Insurance
SGI Philippines General Insurance
Oona Insurance

When selecting an insurance provider, make it a point to compare quotes from different companies and not go with the one a friend or a family member suggested. This will help you get the best deal available and give you a chance to negotiate.

Insurance tips for first-time car owners

When choosing an insurance provider make sure to consider their customer service support, availability of 24/7 hotline number, and speed of claim process.
If you have other items to insure, try bundle policies, as they can make you eligible for a discount.
When signing the insurance contract, make sure to read the fine print; this will save you from surprises later.
Keep open communication with the insurance agent.

Bottom line For a first-time car owner, there are a few boxes that you need to tick, including getting the car registered at the LTO, obtaining a driver’s license, and car insurance. Now, while the first two tasks are quite straightforward, wherein you are required to follow a few steps in a given sequence. It is the car insurance task that requires attention. Why? Well, that’s because getting the right car insurance policy will save you from a lot of financial stress. The CTPL insurance is mandatory; you need to decide on comprehensive coverage and other add-on coverage options. We recommend that you make a decision based on your requirements, driving habits, your driving environment, and finances. This way, you’ll get a car insurance policy with sufficient coverage, which doesn’t disturb your budget, and offers peace of mind. FAQs I am a first-time car owner. Is CTPL insurance sufficient for me? No. CTPL insurance will only provide you coverage against third-party injuries/death. It is recommended that you also get comprehensive coverage for wider protection. Is it possible to buy car insurance online in the Philippines? Many well-known insurance providers in the country are offering online services to their clients, providing convenience to buy insurance and file a claim online. The process is mainly quick, simple, and straightforward. How much does car insurance cost in the Philippines? CTPL insurance is quite affordable, ranging from PHP 650 or less to PHP 1,500 per year. Comprehensive insurance, on the other hand, for its wider coverage, is priced high, from PHP 10,000 to over PHP 100,000 per year. What will happen if I fail to renew my car insurance policy? With no active CTPL insurance, you won’t be able to renew your car registration. Also, you and your car will be without protection. Is ‘Acts of Nature’ coverage beneficial? It depends. If you live, drive, or park in an area that is prone to natural disasters like floods, typhoons, earthquakes, and others, the ‘Acts of Nature’ coverage is essential for you. Is it possible to cancel car insurance before it’s due for renewal? Yes. You can cancel your car insurance policy at any time, just inform the provider. Note that you might have to pay a cancellation fee, depending on your policy’s terms and conditions. How can I determine the right car insurance for me? To get the right insurance policy for your car, consider factors like your car’s value, driving habits, budget, your risk profile, and location requirements. What is a deductible? You pay the agreed-upon amount from your pocket before the insurance company begins covering the expense.