Should you get car insurance from your bank, dealer, or a broker? Here’s the answer!

Where should I buy car insurance—a bank, an insurance broker, or a car dealer? This is a question many Filipino car owners often ask themselves when purchasing insurance. They need to decide quickly, as vehicle registration is not possible without a CTPL insurance policy. It is a fact that most dealers offer handled CTPL insurance for you, which you are not obligated to accept. Instead, you can secure the policy from other sources, such as an accredited bank or broker. You see, each option has its own perks, from banks ‘exclusive rates, brokers' tailored deals, and dealers' bundled plans - it is all like a puzzle for a car owner.

This whole dilemma around the best avenue to buy car insurance is exactly what we’ll be discussing today. In this article, we’ll break down each option, discuss its advantages & drawbacks, so that by the end, you know the route that provides better coverage and savings.

So, let’s get started…

ABCs of car insurance in the Philippines

First things first, it is essential to understand the basics of car insurance before exploring the various purchase options, including banks, dealers, and brokers.

Why is car insurance essential?

Car insurance is like a safety net that provides coverage for accidents, natural disasters, theft, and third-party liability. Some plans are customised to include roadside assistance or accessories coverage.

Also Read: To-do list after getting a car insurance policy

Types of car insurance policies

Here’s a brief breakdown -

Compulsory Third-Party coverage	Covers third-party bodily injuries or death
Comprehensive coverage	Protects the insured vehicle against damage caused by accidents and other reasons
Add-ons	Additional protection, like engine protection, Acts of God, zero depreciation, and personal accident cover

Also Read: Common misconceptions about car insurance add-ons in the Philippines

Buying car insurance in the Philippines

There are three options for buying car insurance in the Philippines: through a bank, a broker, or a dealer. We’ll now discuss each one-by-one in detail.

Car insurance from BANK

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Most major banks in the country have partnered with insurance companies to provide policies to their clients. They act as mediators and offer bank-exclusive deals.

Advantages of buying from a bank

Existing customers get to enjoy loyalty discounts
Hectic paperwork gets taken care of by bank officials
No tension forgetting to pay the premium with the bank’s auto-debit function

Disadvantages of buying from a bank

No claim support, as banks have no expertise in the field
Limited options for insurance providers, so not much comparison is possible
Costly compared to market rates

Car insurance from DEALER

Photo from Consumer Report

When someone buys a car, the dealer often pitches an insurance plan as part of the sales process. These plans are usually from its few tied-up insurance providers. Furthermore, dealers earn commission on every policy sold, thus making it a profitable avenue for the salesperson. The deal becomes even better if the dealer can offer bundled deals.

Advantages of buying from a dealer

When you buy insurance from a dealer, you drive out fully insured
The whole process is fast and hassle-free
An insurance policy is usually pre-approved by the car’s brand partner

Disadvantages of buying from a dealer

Limited transparency on premium breakdown
Expensive due to markup
Hard to customise the policy

Car insurance from BROKER

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Brokers, also known as insurance agents, are independent professionals who are licensed by the Insurance Commission to sell policies to car owners. Their job is to find you the optimum coverage at the best possible price.

Advantages of buying from a dealer

Policyholders receive comprehensive assistance with claims and renewals
Customisation of policy is available, tailored to car owners' requirements
Access to multiple providers, making comparison of quotes possible

Disadvantages of buying from a dealer

Brokers might charge a small service fee
Quality of service depends upon the broker’s expertise, experience and network

Bank vs. Broker vs. Dealer: Finding the one with the best offer

Parameter	Bank	Dealer	Broker
Cost	Moderate	Very High	Often Lowest
Number of providers	Low	Moderate	High
Convenience	High	Very high	High
Customisation	Limited	Low	Excellent
Claim support	Average	Weak	Strong
Suitable for	Banks loyal customers	First-time car buyers	Informed buyer

Also Read: Car insurance expiry in the Philippines - Top FAQs answered

Bank, broker, & dealer: Which seller makes sense for you

Choose a bank as your insurance partner if you prefer convenience and want to take advantage of loyalty discounts.

Go for the dealer as your insurance partner if it is your first car and you want instant coverage. Though a dealer policy works fine, you can switch to a better plan or provider.

Trust a broker as your insurance partner to secure the best deal, enjoy excellent customer support, and benefit from flexibility.

Tips to procure the best car insurance deal

Make sure to read the fine print, know policy inclusions and exclusions.
Compare quotes from at least three to four providers before finalising one.
While deciding upon a deductible, make sure to pick an amount you can afford.
Do check the insurer’s claim settlement ratio.
Do not choose a dealer or bank just because they are offering you gifts.
At the time of policy renewal, make sure to compare quotes.
Opt for add-ons that fit your needs; both over- and under-insurance is not recommended.

Also Read: 8 Dangerous car insurance scams to beware of in the Philippines

Bottom line

From which car to buy to where to purchase insurance, the work never seems to end. However, your choice can make all the difference. You see, there are three avenues for buying insurance in the Philippines: through banks, brokers, and dealers. Each has its own set of pros and cons, and the decision depends on your priority. For instance, if convenience is the most critical factor to you, then consider a bank or a dealer. But if you want to save money and need choices, an independent broker will suit you well.

Remember, at the end of the day, protection is all that matters. Insurance serves as a financial safety net in the event of unforeseen circumstances. So, choose the provider and plan that fit your budget and meet your requirements. Don’t compromise, never hesitate to ask questions, and make sure to compare—this will ensure an optimal policy.

FAQs

Q1. Is it cheaper to buy insurance from a dealer in the Philippines?
Ans. Not necessary, as dealers often add their commission, which adds to the insurance cost.

Q2. Do banks in the Philippines offer a discount on car insurance?
Ans. Some banks offer customers loyalty discounts; however, it is advisable to compare them with the market prices.

Q3. Can I switch my dealer insurance to a broker?
Ans. Yes, a policyholder can switch insurance providers from a dealer to a broker at any time.

Q4. Is it safe to purchase a policy from a broker in the Philippines?
Ans. Absolutely, it is safe to buy an insurance policy from a broker, provided they are certified by the Insurance Commission.

Q5. Who handles claims in the Philippines: the bank, the broker, or the dealer?
Ans. Claims are handled only by the insurer; banks, brokers, and dealers only sell policies.

Q6. Is dealer insurance expensive compared to the rest?
Ans. Yes, dealer insurance is usually more expensive as it includes commission and convenience charges.

Q7. Is it possible to negotiate insurance rates?
Ans. Negotiation is possible with brokers; however, dealers and banks tend to reduce prices significantly.

Q8. Are brokers associated with all insurance companies in the country?
Ans. Not necessary, only reputed brokers represent multiple insurance providers in the country.

Q9. Will cancelling my dealer insurance affect my car warranty?
Ans. Not at all, dealer warranty and insurance matters are two separate things.

Q10. What are the benefits of buying insurance from a broker?
Ans. A well-known, reputable broker lets you choose from a pool of providers and even supports policy personalisation.

Q11. Do banks ensure faster claim processing?
Ans. No, banks have nothing to do with filing or processing claims; that's the insurance provider's responsibility.

Q12. From where should a first-time buyer get insurance?
Ans. Typically, dealers are preferred, as they simplify the process and handle all the paperwork.

Q13. Which is considered the best avenue to buy insurance in the long term?
Ans. We’d say a broker, for its flexibility and better deals as your requirements evolve.

Q14. Can brokers assist in case of a dispute with the provider?
Ans. A well-experienced broker can definitely assist you better, given their extensive years in the market.

Also Read: The rights of a car insurance policyholder in the Philippines