Switching car insurance providers in the Philippines

Current state of car insurance in the Philippines

The Philippines' car insurance market is evolving constantly, driven by technological advancements and ever-changing client needs. Therefore, for anyone looking for an insurance policy for their new ride or wanting to make a switch from their existing insurer, it is essential to know about the current insurance landscape. Starting with the coverage type you’ll be offered.

Car insurance coverage: Mandatory vs. Optional

In the Philippines, the government requires every car owner to have minimum coverage, i.e., Compulsory Third Party Liability (CTPL). However, for additional coverage, several car owners opt for comprehensive coverage that offers additional protection against theft, collision, personal injury, and natural disasters. Note that this additional coverage comes at a cost; you need to pay a higher premium. The table below gives a clear brief about the two coverage options -

Car insurance & digitisation

As mentioned earlier, in recent years, the car insurance market has seen some amazing transformation, all thanks to digitisation. Applicants these days prefer convenience, and digitisation does the job perfectly. Insurance providers with a strong online presence, offering quote and policy management facilities, are considered advanced, up-to-date, and are popular among clients.

Here are the key benefits -

• Easy access to customizable insurance plans catering to individual needs
• Easy policy and quote comparison
• Easy & quick claim filing process
• Competitive pricing (all thanks to increased competition among insurance providers

The right time to switch car insurance providers

In case you are experiencing any of the below-mentioned issues, it is a clue to start considering saying bye to your current insurance provider. Remember, car insurance is a significant investment, and if things are not going as promised or your requirements are not being met, it’s better to switch.

Increase in premium

While it's not that common, sometimes insurance providers raise the premiums. Such a change can impact your budget and hurt even more when it comes without any additional benefits or improvements.

Poor customer service

Good customer service is a must for any service provider, and when it comes to insurance, it is non-negotiable. It is the only way to show the clients that you care. So, if your queries or problems are not being heard or resolved on time, it is a sign to make a switch.

Coverage needs to be met

In case your current insurance provider is not able to offer coverage options that fit your needs and requirements, there is no point in sustaining such a partnership. It’s better to switch to a provider that customises the policy as per your requirements.

Slow claim settlement

Slow claim filling and settlement process is a big NO. It is considered a RED flag when you face delays or disputes during claims filing and/or settlement. Remember, you are paying a premium so that you get help when needed, so don’t accept such issues. Rather, go for an insurer that offers an efficient and hassle-free claim settlement experience.

Evaluate your insurance policy

Another crucial step while switching your car insurance policy is examining your current policy thoroughly. Only when you understand your current policy and provider will you be able to decide whether to stay or switch. Below, we have mentioned the key steps to analyse your policy -

Review coverage scope & limitations

Start by reviewing the coverage details of the policy in hand. Here, you need to check the inclusions, exclusions, limitations, and deductibles. Make sure the comprehensive coverage includes protection against risks like accidents, natural disasters, and theft.

Identify the gaps

Now that you know what’s included and what’s not, it is time to identify the gaps. In simple terms, check if your current insurance needs are met by the policy or not. For instance, if you have recently relocated to a flood-prone area and your policy doesn’t cover protection against acts of god. Such a significant gap can leave you financially vulnerable in unforeseen events.

Understand the current premium structure

It is very important to understand the policy’s premium structure, break down all the costs and compare them with other providers.

Access the add-ons included

Check what add-on services are part of your current policy. Add-ons like roadside assistance, towing, etc, no doubt add value to the package, but it is important to check if they are available or can be obtained at a lesser price from private service providers.

Compare quotes, go beyond the price tag

If you are looking for a new insurance provider, it is essential to compare quotes. And when we say so, it doesn't mean just looking at the premium, but taking into consideration other important factors as well. Here are some tips to consider when comparing insurance policy quotes -

• Make sure to compare the policies that offer similar coverage, deductibles, and additional features.
• While comparing quotes/policies, make sure to properly understand your deductible obligations or any out-of-pocket expenses.
• Do factor in potential savings like discounts for safe driving, bundling policies, and loyalty rewards while comparing policies.

TIP: If all this sounds like too much work, then check out online comparison tools that will evaluate multiple quotes side-by-side for you.

Step-by-step guide to make a switch

The process of switching your car insurance provider is a tedious one and involves several steps and preparations (to ensure a smooth transition).

Step 1. Decide on your new insurance provider
Time to choose a new insurance provider. Do this by comparing quotes, reviewing customer feedback, and checking the insurer's reputation. Also, check the Claim Settlement Ratio (CSR) to know how efficiently claims are handled by the insurer.

Step 2. Reach out to your current policy provider
Before heading to the newly selected insurance provider, make sure to cancel your current policy. Remember to enquire about the unused premium, so providers have the policy to refund this amount. Also, request a No Claim Bonus (NCB) transfer certificate if you have earned such a bonus. Why? An NCB certificate can reduce the premium of your new policy.

Step 3. Gather necessary documents
Before applying for a new car insurance policy, it is advised to gather all necessary paperwork. This includes your current insurance policy, vehicle registration, among other relevant documents.

Step 4. Visit the new insurance provider
You can do so from the comfort of your home/office. Just visit the insurance provider’s website and check out the car insurance policies on offer. Here you’ll be required to enter details like car registration number, license number, etc. Choose the desired coverage and continue the purchase process.

Step 5. Declare the car’s IDV
When a comprehensive insurance policy is purchased, the applicant is required to declare the vehicle’s Insured Declared Value (IDV). IDV is nothing but the approximate current value of the car. It usually comes into play in case of car theft or extreme damage.

Step 6. Review the new policy
It is always suggested to read the final print of the policy. It is important that you clearly understand the terms and conditions of the new car insurance policy to avoid any surprises during the claim settlement process.

Step 7. Make the payment
Time to finalise the deal, do this by making a payment for your chosen policy.

Advantages & disadvantages of switching to a new insurer

Switching to a new car insurance provider comes with its own set of advantages and disadvantages. It is like gambling, you can either be happy or miss your previous policy. Below, we have listed the pros of choosing a customer-centric provider and the cons of leaving your current policy.

A few tips for a swift transition

• First, cancel your existing policy, then move on to purchase a new one.
• Do not forget about the No Claim Bonus and its benefits.
• Identify the issues with your current insurer before selecting a new provider; this will help you from repeating mistakes.

Bottom line

There’s no need to stick with your insurance provider if you aren’t satisfied. Yes, there’s no point paying the premium and still not getting the service as expected. The car insurance market in the Philippines is diverse, with several providers offering top-notch services and coverage options. There’s no point getting stuck; switch your car insurance provider today by following the above-mentioned steps. But remember not to repeat the same mistakes as you did with your previous insurer, so before going forth, evaluate your needs and circumstances. Go with an insurance provider that offers coverage that suits your requirements and budget. Additional tip: Do negotiate and ask for a discount when finalising the insurance deal.

FAQs

Q1.) Can I cancel my car insurance policy in the middle of a policy term?
Ans. Yes, of course. As per the will, a policyholder can switch his/her insurer anytime, even during the policy term.

Q2.) Is there a good time to switch car insurance providers?
Ans. Consider switching, in case you are experiencing a difficult time with your insurance provider, like high turnaround time, frequent bad experiences, or if there is a new, more attractive insurance option in the market.

Q3.) Is it possible to make a switch after the original policy renewal deadline?
Ans. Insurance providers in the Philippines usually offer a grace period for renewal. Utilise this period to renew your policy or make a switch to a new provider.

Q4.) After switching car insurance, will I lose discounts and other perks?
Ans. Certain benefits, like No Claim Bonus, may get carried over, given that you get car insurance certificates and share them with the new insurer. Note, certain plan/insurer-specific benefits may not get transferred.

Q5.) Is it necessary to cancel my original insurance policy before switching to a new provider?
Ans. It depends. For instance, if the switch is made mid-term, then you need to first cancel the existing policy. On the other hand, if the new insurance policy’s coverage begins after the expiry of the current policy, there’s no need to cancel the policy.

Q6.) Do insurance providers conduct vehicle inspections before insuring the unit?
Ans. Several car insurance providers inspect the car before insuring the unit.

Q7.) Is it recommended to change car insurance providers frequently?
Ans. While you can switch your car insurance at will, frequent changes may lead to consequences like a high premium.

Q8.) What about the premium I paid? Will it get refunded if I make a switch?
Ans. Some insurance policy companies refund the premium, but on a pro rata basis, i.e., the premium will be adjusted to correspond to the remaining insurance policy term.

Q9.) Can I cancel my car insurance policy after filing a claim?
Ans. It all depends on the insurance provider's terms and conditions. Providers often allow cancellations after a claim is filed.