The rights of a car insurance policyholder in the Philippines

Owning a car is undoubtedly a big thing for many Filipinos, especially if it’s your first one. However, it is a fact that this new possession comes with its fair share of responsibilities and risks. You could end up in an accident, collide with an animal or damage your vehicle in flood or fire; the list is long, and therefore a strong safety shield is a must. Apart from driving safely and buying a safe car, you need insurance that offers financial protection during tough times.

In the Philippines, the car insurance market is filled with players offering amazing policies, but all of it would go down the drain if you aren’t aware of your rights as a policyholder. There are several advantages of knowing your rights, like -

Fair treatment
Proper compensation
Transparent service

In this article, we have discussed in detail all the rights a car insurance policyholder enjoys in the Philippines. So, read along and make the most out of your insurance policy.

Car insurance policyholder: Legal status & responsibilities

Who is a car insurance policyholder? Any person whose name appears on the insurance contract is a policyholder. This individual has the authority to file a claim, request policy modification, and enforce policy terms.

Responsibilities of a policyholder -

Provide accurate information (personal & other details) to the provider
Pay the premium on time
Comply with policy requirements

Also Read: From confused to confident: Car insurance tips for first-time Filipino drivers

Rights of a car insurance policyholder

Let us now discuss the rights of a car insurance policyholder in the Philippines -

Right to transparent information	Every policyholder has the right to receive complete information about the policy. This is only possible if the policy documents are clear and provide detailed information regarding coverage, inclusions, and exclusions. Furthermore, the insurer must discuss hidden clauses and deductibles with the applicant before the application is submitted.
Right to proper coverage & fair premium	A policyholder has the right to a fair premium based on the vehicle’s fair market value and the coverage provided. Overpricing or hidden charges are a violation of the rights and could be reported to the IC.
Right to fair and timely claims	In the Philippines, insurance companies are required to settle claims within 30 days after receiving a duly accomplished claim form and all the required documents. Delay beyond this period may warrant an official complaint to the IC.
Right to file a claim	The policyholder has the right to file a claim after an accident/collision. Your agent or insurer should guide you through the process and ensure that the claim is settled promptly.
Right to the authorised repair shop	Every provider has a network of authorised repair shops. The policyholder must be aware of all options and be able to select one from the given choices.
Right to cancel policy or switch providers.	The policyholder is free to cancel or modify the policy at any time. Even switching to a new provider is an option open to all clients.
Right to data privacy	All the personal and financial information shared by the policyholder with the provider must stay protected. There shall be no unauthorised data sharing.

Common issues policyholder faces

Here are some of the common issues faced by policyholders in the Philippines -

Policyholders often charge hidden fees in the form of administrative costs that were not disclosed in the initial policy documents.
Unauthorised deduction from the claim is a common issue faced by insurance applicants.
Policy misrepresentation is the worst; here, agents/providers fail to adequately disclose policy exclusions.
Delayed claims are also a common issue faced due to unclear and missing documents.

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

Policyholders’ rights & the IC

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The Insurance Commission of the Philippines is a regulatory body that oversees and supervises insurance companies in the country. One of its jobs as a supervisor is to protect policyholders' rights and promote transparency in regulatory measures.

Let us now check out how IC protects your rights -

The IC acts as a mediator between the policyholder and the provider, ensuring both sides are given a fair chance to explain and are heard equally.
IC time and again imposes sanctions on providers and regularly audits them, ensuring that the insurance market retains its trust and fairness.

Filing a complaint with the IC

Now that we understand the role of IC in protecting policyholders’ rights, let us learn about the process for filing a complaint.

It all starts with downloading the IC’s assistance form and writing a formal complaint addressed to the IC, along with attaching essential documents like a copy of the policy, a copy of the denial letter, claim documents, correspondence with the provider, and other specific requirements. Lastly, you can submit the form in person or email it to the IC.

Resolution timeline & process

The complaint filed with the IC is reviewed and mediated within 45 to 90 days, depending on the complexity of the case. Furthermore, insurers that violate the regulations are at risk of having their licenses revoked or being charged with penalties.

Bottom line

Every car owner in the Philippines is required by law to at least get CTPL insurance. As for comprehensive insurance and add-ons, they are highly recommended but optional. However, what’s common is the specific legal rights bestowed upon a policyholder to protect their financial interests and ensure fair play. But these rights will only come into play if you choose an IC-accredited provider. There are a few other things you must remember to do as a responsible policyholder; these include reading the fine print, keeping records, reporting unfair practices, and asking questions.

Remember, awareness is your best defence and knowing your rights is a great tool to fight dishonest agents or providers.

Also Read: Top 8 defensive driving tips for Filipino drivers to stay safe and save on insurance

FAQs

Q1. What are some of the basic rights of car insurance policyholders in the country?
Ans. All policyholders have the right to cancel their policy, request modifications, transfer ownership, receive timely claim settlement, and have transparent policies.

Q2. Can I switch car insurance providers at any time?
Ans. Yes, a policyholder can cancel their policy at any time and apply for a new one at any time.

Q3. How long does it take to process a car insurance claim?
Ans. Typically, a provider takes 7 to 30 days to process a claim, provided all the necessary requirements are submitted.

Q4. My claim was denied. What should I do?
Ans. In such a case, request a written explanation from your insurer and retry with the required amendments. If that doesn’t work, file a complaint with the Insurance Commission.

Q5. Does the law in the Philippines require a car insurance policy?
Ans. The law requires all motor vehicle owners to have Compulsory Third-Party Liability (CTPL) insurance. This one is needed for LTO vehicle registration.

Q6. Is CTPL insurance enough for a car owner?
Ans. CTPL insurance only covers third-party bodily injury or death. It doesn’t cover the insured vehicle, the car owner, or the passengers; therefore, it is not enough for a car owner.

Q7. Can an insurance provider charge hidden charges? Is it legal?
Ans. No, it is not legal for insurance providers to hide fees. According to the law, all payments must be disclosed to the client up front.

Q8. I am selling my car. Can I transfer my policy to the new owner?
Ans. Yes, a policyholder can transfer their policy to a new owner, but first, the provider must be informed, a written approval must be obtained, and any required changes must be made.

Q9. How can I check the legitimacy of a provider?
Ans. When choosing an insurance provider, ensure the provider is accredited by the Insurance Commission (IC) of the Philippines. Visit the IC’s website to see if the provider is listed as a licensed company.

Q10. How can I submit a complaint to the IC?
Ans. The complaint submission option with IC can be done either via email or in person, where you can drop off the complaint letter at the IC’s Manila office.

Q11. What supporting documents are required to file a complaint at the IC?
Ans. Your complaint must be accompanied by supporting documents, which serve as evidence of your claim. The list includes a copy of the policy, claim number & date of the loss, all relevant correspondence, invoices, medical records, and a log of phone calls.

Q12. What documents are required to file a claim?
Ans. To file a claim, you typically need the following documents: police report, vehicle’s OR/CR, photos of the damage, and driver’s license.

Q13. How can I check if my policy is still active?
Ans. You can check your policy status by either contacting the insurer/agent directly or through the dedicated online portal.

Q14. How to ensure I’m getting the right car insurance coverage?
Ans. To ensure optimal coverage, assess your needs and compare two to three policies based on premium, coverage, claim process, and customer service.

Q15. Should I file an insurance claim for minor damages?
Ans. It is recommended to file an insurance claim only if the repair cost exceeds the deductible.

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