What is car insurance, and why does every Filipino driver need car insurance

Buying a car comes with a lot of responsibilities. The one sitting behind the wheels, controlling every move the car makes, you are responsible for the safety of the vehicle and the pedestrians around you. In addition, you have to make sure that passengers accompanying you are safe. Sounds like a lot to take in, right? However, it is not that difficult; all you need to do is drive safely, follow traffic rules, know road signs, signals, & markings, and get car insurance. While you can learn about the first two in detail at the Land Transportation Office (LTO) website, we are here to discuss car insurance. Getting to know car insurance becomes more important, seeing the surge in the number of vehicles purchased every year, all thanks to the easy accessibility of financing options. But what about insurance, is it rising at the same pace as cars in the country? Sadly, the answer is NO. Despite so much awareness and several insurance providers, people still give car insurance a second thought. It is still considered an added expense that car owners try to minimise as much as possible. It therefore becomes essential to make sure that car owners, new and seasoned, understand that car insurance is not just a dead investment but a solid shield offering financial support when you need it the most. It will be your true friend during your difficult hours. So, without wasting any time, let’s have a deeper look at what car insurance is, what it offers, and why every Filipino driver needs it.

Understanding car insurance

What is car insurance? Car insurance is a contract between two parties - the vehicle owner and the insurance provider. Here, the latter offers financial protection to the former in case of damage or accident involving the insured car. The help is offered in exchange for a premium. Here’s a great one-liner to understand car insurance: Car insurance does not prevent accidents/damages, but it prevents such uncertain events from ruining you financially.

Car insurance in the Philippines

In the Philippines, a car owner is legally bound to get his/her car insured. The car insurance scene in the country is broadly divided into two categories - Compulsory Third-Party Liability (CTPL) insurance and Comprehensive insurance. Compulsory Third-Party Liability (CTPL): If you are a new car owner who wants to register his/her car with LTO, then you are first required to get CTPL insurance. The same is the case with registration renewal; CTPL is mandatory. However, it is not just a prerequisite, but it also offers protection to the insurer against third-party injury or death. In simple words, if you get into a car accident, causing injury or death to the driver/passenger of the other involved vehicle, then CTPL will take care of the expenses (like burial, funeral, ambulance, medical bills). Comprehensive Insurance: Unlike CTPL, comprehensive car insurance is not mandatory by law, but it is highly recommended. Depending on the policy and its inclusions, this one offers coverage against the following: damage to your car, fire, theft, vandalism, natural disaster, damage to third-party property, and more. Further, some insurance policies also include roadside assistance, towing, and personal accident coverage.

Photo from ETAuto

Why does every Filipino need car insurance?

Now that you have a brief idea about car insurance and its types, it is time to get real and understand why it is essential for every Filipino driver. Here are the top 10 reasons to convenience you to get car insurance. Financial protection against accidents Accidents happen, and if you live in a city like Metro Manila, they happen a lot. As per the MMDA (Metropolitan Manila Development Authority), from Jan to November 2024 alone, 62,723 cases were reported, with 332 fatalities, and most road accidents involved a four-wheeler. It doesn’t matter if you are a safe driver, as you can’t control a speedy jeepney swerving into your lane or a motorcycle squeezing through that tight spot in front of you. And god forbid there can be a pothole too, eager to ruin your tyre. With car insurance by your side, all the expenses from these unfortunate events will be taken care of by the insurance company. It’s a legal requirement Yes, in the Philippines, you are legally bound to get Third-Party Liability insurance. Without CTPL, your car won’t get past the LTO registration or renewal process. Sadly, this is the only motivation many car owners have to get insurance. However, you should note that CTPL insurance offers only the bare minimum coverage. Protection against natural disasters like floods and typhoons We live in a land that every year experiences several floods, typhoons, and earthquakes. And when it rains, the entire city gets flooded, which often submerges the car and damages it. Thus, leading to the repair cost going up by thousands of pesos. With the comprehensive insurance’s ‘Acts of Nature’ coverage, you’ll have to bear to repair or replace. Theft and vandalism can take place No country is immune to theft and vandalism, and the same is the case here. Your car is at risk of getting stolen, parts getting stripped, and the side mirror getting smashed. Without insurance, you have no protection, no financial help; only stress and debt. However, with comprehensive insurance by your side, you will get coverage if your car gets stolen or damaged by criminals. Protection from a mess that’s not your fault Imagine a situation where your car was part of an accident that was not even your fault, a case where the other party isn’t insured, or you were caught in a hit-and-run case. In all such events, your insurance policy will come to your rescue and cover all the damages. There would be no need to rely on someone else's help. Don’t underestimate the value of peace of mind Having a car insurance policy gives you peace of mind every time you drive, get involved in an accident minor or major. Having car insurance keeps your panic level down and gives you the next course of action to follow. In this day and age, we are already stressed, car insurance brings us some relief. Saves your money You just pay a few thousand pesos annually as an insurance premium, which is nothing against the financial protection it offers you in case of a major collision, car theft, or damage. Towing and roadside assistance It is no fun getting stranded roadside without fuel, a dead battery, or with a flat tyre. Many insurance providers in the Philippines offer 24/7 roadside assistance, wherein you will be allotted a mechanic or tow truck at just a call. No need to worry and ask strangers for help. Easy resale Car insurance pays you off in more ways than you can imagine. It even makes selling your car easy, as a used car buyer would always prefer a well-documented, insured car over a car that has not been taken care of. We hope that, by now, you are fully convinced that having car insurance is nothing but beneficial. Now, at this point, you might have two major queries - Where to buy car insurance from and how to choose a policy that is perfect for you? Continue reading to find answers to these questions.

Photo from Freepik

Top car insurance providers in the Philippines

Here are some of the well-known car insurance providers in the country that you could consider -

Malayan Insurance
Etiqa
Prudential Guarantee and Assurance, Inc.
Oona Car Insurance
SGI Car Insurance
Standard Insurance
Pioneer Insurance
FPG Insurance

How to choose the right insurance policy?

When you are shopping for an insurance policy for your car, here are a few things to consider -

Check what risks are included and which ones are excluded from the policy
Reputation of the insurance company
Customer service
Swiftness of the claim process
Inquire about deductibles
Check the availability of partner repair shops
Availability of a 24/7 hotline number

Bottom line The reality is that roads are not safe. In the Philippines itself, there’s so much danger to a car owner - from heavy traffic jams in Metro Manila to typhoons in Cagayan Valley, Bicol, and Eastern Visayas, the chances of road accidents and car damage are high. And that’s where car insurance steps in to rescue you from all the associated financial burden. Despite all the benefits, many Filipinos still view car insurance as an optional expense or worse, a document required for vehicle registration at the LTO. But remember, guys, having car insurance will take a bad situation from a major financial disaster to a minor inconvenience. FAQs Why is car insurance compulsory in the Philippines? The government has made car insurance mandatory for car owners’ financial protection. The CTPL insurance covers the cost of injuries or damage caused to a third party by the insured car. Apart from covering repair costs, what are the major benefits of comprehensive insurance? A comprehensive car insurance policy has several benefits. It not only covers the repair or replacement cost of your car but also provides financial protection in case of car theft, fire, vandalism, damage due to natural disaster, and third-party liability. What is the difference between CTPL and Comprehensive Insurance? While CTPL insurance is mandatory by law, comprehensive insurance is optional. The former covers third-party bodily injury/death, the latter offers much broader protection (theft, fire, natural disaster, etc) and therefore charges a high premium. Name some of the top insurance providers in the Philippines. Malayan Insurance, Etiqa, Prudential Guarantee and Assurance, Inc., Oona Car Insurance, SGI Car Insurance, Standard Insurance, Pioneer Insurance, and FPG Insurance are some of the leading names in the insurance sector.