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The Basics of a CAR INSURANCE POLICY


Your Car Insurance Policy consists of the following coverage:

Compulsary Third Party Liability (CTPL)

This is your compulsory bodily insurance liability requirement when you register your vehicle at the LTO (Land Transportation Office). The standard coverage limit for CTPL is Ph 100,000.00. Excess Bodily Injury (EBI) This is an insurance coverage stipulated on your comprehensive motor car policy. This coverage will respond only after you have utilized your limit on your CTPL Policy. You can usually avail EBI limit up to Ph 500,000.00

Property Damage (PD)

Covers liabilities arising from damage caused by your car to someone else’s vehicle or property. Average Limit can be between Ph 100,000.00 up to Ph 500,000.00.

Auto Passenger Personal Accident Insurance (PA)

Covers bodily injury of the driver and passenger of the vehicle due to accident.

Acts of Nature (AON)

is the newest add-ons in the motor car policy. This coverage will respond on any claims on your vehicle caused solely by earthquake, typhoon, flood and other natural catastrophe like volcanic eruption, hurricane and other natural forces without any human interference. Financial institutions like banks usually require an AON when a vehicle is mortgaged to their company.

You can insure your vehicle in different categories:

1. CTPL only
2. Comprehensive – OD/Theft, EBI, PD, Auto PA
3. Comprehensive with AON- Acts of Nature

DEDUCTIBLE

Deductible is applicable only when filing a claim on the Own Damage, Theft & AON portion of your policy. There is no DEDUCTIBLE when you file a claim on EBI, PD and Auto PA.
DEDUCTIBLE is the amount you have to pay out-of-pocket for the expenses on your claim before the insurance company will cover the remaining costs. This is usually 0.5% or 1% on the amount of your OD/Theft Coverage but not less than 2000 pesos or 3000 pesos respectively. DEDUCTIBLE on AON related claims is 2% of OD/Theft coverage.
After applying the DEDUCTIBLE on your claim, a PARTICIPATION on the DEPRECIATION cost of will also be deducted.

PARTICIPATION (share on DEPRECIATION of parts replaced)

Only vehicles starting with age over 3 years will have a PARTICIPATION on cost of replaced brand new parts starting at 20%, then 25% for over 4 years and increases with an increment of 5% every year thereafter up to 40% for over 7 years old vehicle. You can check the detailed schedule of DEPRECIATION on the cover jacket of your policy contract.

A 2012 Toyota Fortuner with market value of Ph 800,000.00 was accidentally damaged with a total replaced parts of Ph 70,000.00 will have the following Deductible and Depreciation based on a Private Car Policy:

Deductible – 0.5% * Ph 800,000.00 = Ph 4,000.00 Participation on parts – 25%* Ph 60,000 = Ph 15,000.00

Email our Insurance Specialist at insure.investopinoy@gmail.com

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