You may hear the phrase ‘Car Insurance’ thrown around and may even have a general idea of what it entails. Yet, you may not know exactly what it means.
Similarly, people always talk about just how vital the cheapest car insurance is and that you need to get it – but you may find yourself asking, why?
We at Perla Insurance, being the best insurance company in the Philippines, want to educate our customers on such topics. And, if you find yourself asking such questions, then you have come to the right place!
In this article, we will talk about what is car insurance and exactly why you need it. We will also cover some essential topics regarding car insurance, so you can easily understand both TPL Insurance and Comprehensive Car Insurance better.
What Is Car Insurance and Why Do You Need It?
Let us begin from the basics. What is car insurance? In this section, we will give a detailed explanation of car insurance.
Car Insurance is an insurance policy to protect the ownership and use of your car against the risk of everyday life such as collision, theft, or any accidents caused to other people, other property, to your own car, driver, or passengers.
Basically, the purpose of vehicle insurance is to protect you and your loved ones against the risks and damages of driving a car on a regular basis. It also protects you against the hassle and financial losses that could come up from such unforeseen accidents.
Car insurance is a legal requirement because of your responsibility for any damage you cause. Thus in order to protect yourself and your property, car insurance saves you the time, money and the hassle that could arise from any damage your car does.
A Car Insurance policy is a contract between a customer and the insurance company. It specifies the risks the customer wants covered, and correspondingly specifies the amount for each type of coverage he wishes to avail of.
As in any contract, fully paying the premium for the policy is a requirement to make the contract effective.
Car insurance offers more than just cover for your vehicle in the event of an accident. It also safeguards you against financial and medical liabilities, and having to deal with unfamiliar circumstances resulting from the accident.
Driving without insurance may result in a hefty ticket, a suspended license and a lack of financial protection in the case of an accident.
Here’s a brief description of our six possible coverage for comprehensive car insurance
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1. Loss and Damage
Loss and Damage covers your car for theft and damage due to your own or others fault. An example of this is if your car is stolen or damaged by yourself or another, then your car will be covered by Loss and Damage.
2. Acts of Nature
Acts of Nature covers your car against typhoons, floods, and earthquakes. An example of this is if your car is damaged due to flooding or if huge debris falls on your car due to an earthquake or typhoon, then your car will be covered by Acts of Nature.
3. Third Party Property Damage
Third Party Property Damage covers damage to another vehicle or property. An example of this is if your car hits another car or a lamp post, then the other car or the lamp post will be covered by Third Party Property Damage. Take note, this does not cover the damage inflicted on your own car for this particular coverage, since that falls under the Loss and Damage coverage.
Compulsory Third Party Liability is the most affordable and required insurance – limited protection caused to other people, medical and death. This car insurance coverage is a requirement of the Philippine government to all car owners.
It is part of the prerequisites for your car registration every year. An example of this is if you bump another person, that person will be covered by CTPL. However as we mentioned it is only limited protection, so its coverage amount is only up to P100K.
5. Excess Bodily Injury
Excess Bodily Injury covers excess liability over CTPL coverage. Therefore, it covers the exact same coverage as CTPL which is protection caused to other people, medical and death, but is an add-on option. So in case you want to be covered for a possible future claim that is higher than P100K, then you should avail of Excess Bodily Injury.
6. Auto Personal Accident
If Excess Bodily Injury covers medical and death caused to other people, Auto Personal Accident on the other hand covers the medical and death of your own driver and passenger in your car.
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