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Comprehensive Guide to Car Insurance in the Philippines

Planning to buy a car? Buying a car calls for many responsibilities. Getting car insurance would be helpful for you, though it might require some requirements for you to accomplish. 

Many individuals are hesitant about getting car insurance because they think it is complicated. But don’t let it be the reason for you to not insuring your car. 

Here are things that you should know about car insurance in the Philippines.

Table of Contents

Table of Contents

What is Car Insurance?

Why Is Car Insurance Important?

Two Major Types to Car Insurance

Compulsory Third Party Liability (CTPL)

How much does CTPL cost?

What are the coverages of CTPL?

How to get a CTPL Insurance?

Comprehensive Car Insurance

Why is Comprehensive Car Insurance Important?

How much does Comprehensive Car Insurance?

What are the coverages of Comprehensive Car Insurance?

Other coverage of Comprehensive Car Insurance

How to Apply for a Comprehensive Car Insurance?

Things you Need to Remember When Applying for a Comprehensive Car Insurance

Basic Car Insurance Terms

Pros and Cons of Car Insurance

Benefits of Car Insurance

Disadvantages of Car Insurance


Step 1: Type of Car Insurance Coverage

Step 2: Research!

Step 3: Questions

Step 4: Read your Policy

Step 5: Extra coverages/Add-ons

Step 5: Discounts, Deductibles, and Premium

Step 6: Gaps in Auto-insurance Coverage

Common Mistakes in Getting a Car Insurance

How to File a Claim For Car Insurance?

What to Do at The Scene of Incident?

What Are The Documents You Have to Prepare?


It is financial protection to your car against any vehicle-related damages. The coverage for car insurance are the following:

  • Property: This covers vehicle damages and theft. 
  • Liability: If you are the offending party, you will be required to pay the damages.
  • Medical: If there are car-related accidents, this covers any medical expenses such as wage-loss expenses or funeral. 

Why is Car Insurance Important?

Having car insurance is important especially in emergencies. Imagine a scenario where a red car hits a yellow car. 

If the owner of the red car has insurance, they can call the insurer and ask them to take care of the damages caused by the accident. So instead of them paying the damages using their own money, the insurance company will cover every damage. 

Car insurance can protect you financially and that is how important it is. 

Two Types of Car InsuranceE

There are two types of car insurance. The first one is the Compulsory Third Party Liability (CTPL) and Comprehensive Car Insurance. Even if you only need to buy one insurance, it is recommended that you buy the two. 

Aside from the two main types of insurance, there are other more types of insurance. But, let’s focus on the two major types of car insurance. 

Here are the two (2) major types of car insurance in the Philippines: 

1. Compulsory Third Party Liability (CTPL)

The compulsory Third Party Liability is the most basic and the most inexpensive type of car insurance. It is mandated by the government for public and private vehicles. 

All vehicle owners in the Philippines are required to have this kind of policy. Usually, you have to buy this insurance before registering your vehicle in the Land Transportation Office (LTO). 

How much does CTPL cost?

The insurance rate for Compulsory Third Party Liability differs according to the length of the coverage and the type of your vehicle. Here are the government-mandated rates:

Private Vehicles: PHP 650.40

Light and Medium Trucks (not more than 3,930 kg): PHP 700.40

Heavy Trucks (more than 3, 930kg): PHP 1,290.40

Motorcycles: PHP 340.40

What are the coverages of CTPL?

This protects the “third party” if your vehicle got involved in an accident. This insurance covers the financial responsibilities related to property damage, bodily injury, permanent disablement, and/or death of the victim/s. 

Aside from that, it also provides financial assistance to the victim and his/her family amounting to about PHP 100,000.

How to get a CTPL Insurance?

One good thing about this type of insurance is that you can get your CTPL Insurance with ease. And aside from that, it is also inexpensive. 

The Insurance Commission of the Department of Finance mandated the cheap insurance rates to ensure that customers can pay the same price among all other insurance companies.  

Here the following documents that you need to prepare:

  • Original vehicle receipt
  • Certificate of Registration of your vehicle
  • Driver’s License
  • Another government valid ID
  • Photocopies of each document

Step 1: Choose your preferred non-life insurance provider. If all goes well with you, you can buy a policy from them. 

Step 2: You will receive a policy with conditions when you buy the insurance. It comes with the Confirmation of Cover (COC). Remember to always have a photocopy of each document that you will receive.

Step 3: Upon your registration to the Land Transportation Office (LTO), bring all the documents. This will prove that your vehicle is insured by third party insurance. 

2. Comprehensive Car Insurance

Comprehensive Car Insurance is a more comprehensive type of car insurance. Though not mandated by the government, it is highly recommended to get one. It not only protects the public, but it also protects you, your car, and your passengers as well. 

This covers the type of damages or losses that are not caused by a collision. The kinds of damages could be caused by a third party, vandalism, theft, or natural calamities.  

Why is Comprehensive Car Insurance Important?

There’s comprehensive car insurance that provides financial protection to you and your car. It covers your car repair and your medical expenses against damage, liabilities caused by collision, car theft, floods, landslides, and many other road misfortunes. 

This type of insurance will give you a sense of security in the event of an accident. You won’t have to spend your own money on the repairs, your medical expenses, legal services and more. 

How much does Comprehensive Car Insurance?

There is no fixed rate with this type of car insurance. The policy coverage differs depending on the state of your vehicle. Here the lists of factors that will affect the policy price rates:

  • Model: The more extravagant your vehicle is, the higher the policy rate.
  • Make: Luxury and foreign makes have a more expensive policy rate.
  • Year: The latest models of cars are more expensive compared to older cars.
  • Usage: The price depends on how worn-out your vehicle is. 
  • Accessories: The more accessories your vehicle has may increase the rate.
  • Safety Measures: It is cheaper to insure a more secure vehicle.
  • Fair Market Value: The policy rate depends on the price of your car in the market. 
  • Depreciation: The price of the policy rate depends on how old or new your car is.

NOTE: Fair Market Value is the estimated price of your car which depends on the model and series. This has an accurate estimation of how much coverage the insurance company provides in case of vehicle damage or loss. 

What are the coverages of Comprehensive Car Insurance?

  • Own Damage/Theft: This covers damage, car loss, and damage or loss of declared accessories and spare parts. But this is only applicable in cases of car robbery, vandalism, and fire or external explosion. Among others, this is the most common coverage for car insurance. 
  • Property Damage or Voluntary Third Party Liability (VTPL): If you got caught in an accident and damaged someone’s car, the insurance company will cover all expenses related to the damages that are related to the accident. It covers the damages caused by your vehicle to the third party’s vehicle or properties.
  • Personal Accident or Auto PA: This provides financial coverage to you and your passengers. Auto PA is usually a free add-on on your car insurance. But it is only applicable in cases of injury, disablement, or death caused by a vehicular accident.  
  • Acts of Nature: This is also known as the “Act of God”. It pertains to financial coverage in incidents of severe weather conditions. This covers vehicles that are damaged by natural disasters like earthquakes, floods, and more. Animal contact could also be covered by this insurance. 

Other coverage of Comprehensive Car Insurance

Here are the lists of some add-ons that you might want to consider on the coverage of your car insurance: 

  • Legal Assistance: If you got caught in an accident that is of a legal case, this insurance will assist you financially for your hearings or legal consultations, or both. 
  • Roadside Assistance: This is an insurance that would assist you in case your car broke down on the road. It will cover different vehicle services like towing services, roadside repairs, and fuel deliveries. 
  • Loss of Use: During the repair period of your vehicle, you may reimburse all your expenses if you can’t use your damaged car. Some insurance companies may offer temporary transport services. 
  • Riots, Strikes, Civil Commotion: This insurance covers damages caused by scratching, kicking, broken mirrors, windows, and windshield. It also covers other forms of damages to vehicles caused by riots. 
  • Pet Injury Coverage: If you always tend to bring your pet in your travels, this pet injury coverage might be of big help for you. This will cover your payment for vet treatments if your pet acquired injuries from a vehicle collision. This also covers the deaths of pets that are related to any vehicular accident. 
  • Lost Wage Recovery: This is a popular car insurance coverage, but not many know about its benefits. In case you cannot go back to work after an incident, this will allow you to reimburse some or your entire wage while you are recovering from your injuries. 

How to Apply for a Comprehensive Car Insurance?

Take note that you can avail of both the Compulsory Third Party Liabilities and Comprehensive Car Insurance. Choose your insurance company and compare the rates from those companies before settling with the best deal. 

Here are the lists of documents needed on your application:

  • Original vehicle receipt
  • Certificate of Registration of your vehicle
  • Driver’s License
  • Another government-issued valid ID
  • Photocopies of each of the documents

The process of your application is almost the same with CTPL. After submitting your documents to your preferred insurance company, you must pay for a certain policy rate. Then the last thing for you to do is to wait for your insurance policy. 

You will receive both a digital copy via your email address and a hard copy on your mailing address. 

Things you Need to Remember When Applying for a Comprehensive Car Insurance

  • Policy Schedule: You should take note of your policy schedule such as the term and expiry of your policy. You may avoid getting charged with additional costs from your insurer. 
  • Fine Print: Read the documents carefully and don’t skip the fine print. You must know the inclusions and exclusions of your policy. Also, take note of the clauses and terms that you would aid you in your claims and renewals. 
  • Budget: When applying for comprehensive car insurance, you should consider your budget. Think about your vehicle and your lifestyle. Also, take note that you would need to pay more for more coverage of your insurance. 
  • Providers: Do your research about the top insurance companies in the Philippines before applying for car insurance. Compare them and choose the one that offers you better and inexpensive deals. 


  • At Fault: This is the person responsible for the accident. 
  • Claim: This is a request for your insurance company. This asks your insurance company to cover or reimburse your expenses due to damage or loss. 
  • Deductible: Before the insurance company can cover the rest of the expenses, you need to pay for a certain amount of money first. This is called the Deductible. 
  • Depreciation: This the gradual decrease in the value of your vehicle due to frequent usage. 
  • Fair Market Value: This is the estimated price of your car that is based on the model and series. 
  • Policy Schedule: This the full details of your insurance policy. 
  • Premium: This refers to the payment of your car insurance. 
  • Primary Driver: This the driver of the vehicle who is covered by the insurance policy. 
  • Surcharge: This refers to the increase in your premium payment due to an expensive claim. 
  • Third-Party: Any person outside and inside the car that is involved in an accident.



  • It provides financial assistance and protection against all auto-related damages or accidents.
  • It gives you peace of mind when unexpected damages and accidents happen. Aside from that it also gives you peace of mind knowing that your vehicle is protected. 
  • It helps you save money. You won’t have to use your own money in paying damages. The insurance company will do it for you.  
  • You can save your time and effort. The insurer will take care of the finances and paperwork for you. 


  • Paying for the premium. Just like the other type of insurance, you also need to spend a certain amount on your premium. 
  • There are some fees like deductibles. You need to pay it before the insurer pays the coverage of your policy.
  • Other types of damages may not be covered by your current insurance company.
  • There’s a possibility that you would not utilize the coverage policy at all. 


1. Type of Car Insurance Coverage

The first thing that you need to do is to know and consider the type of car insurance coverage that you need. It should be based on the protection that you want. You can choose between the most basic or the most comprehensive coverage. 

2. Research!

Do your research online. Compare the different insurance companies and the coverage that they offer. Contact a significant person in your prospect company and ask them questions about their insurance policies. 

You may also look for other customers and read or ask their feedback about the insurance companies. One of the best ways to do is to look for a representative that would give you all the information that you need. 

3. Questions

Before meeting with the actual representatives, prepare your questions and concerns about the coverage and the insurance company. This will help you not forget any important questions that you need to know. 

4. Read your Policy

Reading the fine print could be a bit of a struggle, but put your time and effort in it. This could be your protection in case an issue arises. 

You might encounter some terms that might be new to you, so take time to understand and know their meaning. Here are some terms that you need to look for:

  • “Collision” and “Personal Injury” coverage
  • “Insuring Agreement”
  •  “Limit of Liability”
  • “Payment for Loss”
  • “Damages We (the insurance company) Will Pay For”
  • “Determining the Amount of Loss”

5. Extra coverages/Add-ons

Some extra coverage and add-ons will be offered to you. But take only those that are necessary for you. You can also ask the insurer if they can remove the extra coverages and add-ons that you think are not necessary for you. 

6. Discounts, Deductibles, and Premium

One good thing to help you save money is to ask your insurer for discounts. But make sure that the discount won’t compromise other coverages of your chosen insurance option. Some insurance companies usually give discounts to entice their clients. So, don’t be shy or hesitate to ask about it. 

If you are paying higher deductibles or a regular payment, you may ask your insurer if they could reduce your premium payment. Take the offer if the insurer gives it to you, because it may give a bit of saving. 

An insurance company usually offers a cheaper Premium if you pay in full. Ask your insurer if they offer this kind of option. Most insurance companies would give you payment options. They might offer you monthly or quarterly premiums but it might have increased interest rates. 

So, if you have enough cash for paying the premium in full, it might help you save your money, time, and effort. 

7. Gaps in Auto-insurance Coverage

Having gaps in your auto insurance coverage could result in a higher premium payment. Make sure you ask your insurer if there are some lapses with your coverage. 

Those gaps or lapses might result in a higher premium for your new insurance or when you renew your insurance. 


1. Always choosing the cheapest option

Cheap options are always enticing. But make sure that the option you are paying covers necessary expenses in case a car mishap happens in the future. 

If you have chosen the wrong option, you might end up paying or spending more. So choose the option that is best for you. The one that offers good coverage at a cheap price or at least, a price that you can afford. 

2. Not reading and understanding the fine print

Fine prints are your friendly document. Be diligent enough to read and understand the document fully. Know the exact details in the fine print. And if you have questions, ask the representatives from your insurance company. 

Be careful with some representatives that would sales talk you into buying the insurance option. Be smart and make sure that what you have chosen is reliable when you make your claim in the future. 

3. Not seeking for more choices

Do not settle with only one option. Always try to seek and understand other options that you can choose from. Choose the one that you think is the best package for you. Remember that not all insurance companies offer the same coverage. 

4. Not asking Discounts and Additional Coverages

In every transaction that you will be dealing with, try to ask for discounts. After all, there is no pain in asking about it. It might even help you save some money. 

Additional coverage includes protection from Acts of Nature like typhoons, earthquakes, fire, and other external explosion coverage. Roadside assistance would also be helpful. So, do not forget to ask for additional coverage. 



  • Contact the police
  • Keep your calm
  • Before you align your vehicle, make sure that the area is safe
  • Setup your Early Warning Device
  • Communicate with the other party and do not forget to exchange both of your contact information
  • Take photos that would serve as your evidence 
  • Ask for your copy of the police report
  • Remember to not accept or approve anything in the scene of the incident. During that time, you might be in shock and might not be able to think well, so refrain from accepting anything to prevent further problems. 


  • Complete claim form
  • Photos you have taken from the incident
  • Police Report
  • Accredited repair shop’s estimate for repairs
  • A copy of your driver’s license and its receipt
  • Copy of your Motor Vehicle Registration Renewal (MVRR) Official Receipt
  • Certificate of Registration

NOTE: When you are done submitting all the necessary documents, your insurer will give you a Letter of Authorization (LoA). Present the LoA to the accredited repair shop so they can start with the restoration of your vehicle.

It’s indeed helpful to have car insurance. If you plan to buy a car, make it insured. Don’t have enough money to get car insurance? Cash Mart can lend you a hand! Apply and enjoy a low-interest loan that may fit your needs!

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