Welcome to the topic “What Is Car Insurance and Why Do You Need It?“
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 car insurance is in the Philippines 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.
What Are The 6 Types of Coverage For Comprehensive Car Insurance?
Now, you may have heard about different possible coverage for comprehensive car insurance, but you may not know exactly what they entail.
That is why Perla Insurance, being the best insurance company in the Philippines, wants to increase this awareness and make this essential knowledge accessible to the general public.
We, at Perla Insurance, offer 6 different comprehensive car insurance coverage to cater to all your auto insurance needs.
To easily illustrate the differences between each one, we divided the list of coverage into two parts. Coverage 1, 2 and 3 are mainly about protection caused to the vehicle: may it be your own or the other’s car or property. While coverage 4, 5 and 6 on the other hand, are protection caused to people: either other people or for your own driver or passenger.
Here’s a brief description of our six possible coverage for comprehensive car insurance:
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.
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.
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.
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.
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.
We, at Perla Insurance, suggest that you avail of all 6 coverage for your own peace of mind, and to save you hassle, financial burden and unfamiliar circumstances in case of an accident. You may ask, why do I need all the coverage?
Let me give you a scenario, for example you only avail of Loss and Damage. Then all of a sudden there’s an earthquake, and huge debris pieces fall and damage your car. Do you think your car is covered? The answer is unfortunately- no.
This is because the damage was caused by a natural calamity and not by your own or another’s fault. Therefore you should have also availed of Acts of Nature to protect yourself from a scenario such as this one.
The same goes if you only avail of CTPL or Excess Bodily Injury, and then you get into a huge car accident. You know CTPL and Excess Bodily Injury only the other’s driver and passenger. So if ever you are wounded or hurt in any way due to the car crash, you will have to shoulder and pay for your own medical bills.
This is why we suggest that you avail of all 6 coverage. This is so you feel secure knowing you are covered for all possible risks. You wouldn’t want to be forced to spend huge chunks of your hard earned money during the time of an accident.
What is the Suggested Amount for the 6 Types of Coverage in Comprehensive Car Insurance?
Now, all this technical talk aside – let’s get to the real deal. That’s right, in this section, we’ll be talking about money.
When getting any form of investment, especially something as important as car insurance, it’s good to do the numbers beforehand so that you know what you are getting into.
This information is also necessary so you know where you are investing your hard earned money on, and weighing the benefits in the long run, especially when you do run into an accident.
At Perla Insurance, we provide the best car insurance in the Philippines. We also believe in transparency and want to keep an open and honest relationship with our clients.
On that note, here are our suggested amounts for the six types of coverage in comprehensive car insurance:
1. Compulsory Third Party Liability (CTPL) – 100K as required by the law
2. Loss and Damage – Fair market value of your vehicle based on the latest transacted price
3. Acts of Nature – Fair market value of your vehicle
4. Third Party Property Damage – 100K or higher in increments of 50K (Ex. 100k, 150k, 200k)
5. Excess Bodily Injury – 100K or higher in increments of 50K (Ex. 100k, 150k, 200k)
6. Auto Personal Accident – 10K per passenger and driver with 2k medical or higher as required
If you really think about it, the cost you invest in your car insurance is so minimal versus the unnecessary expenses and hassles when you don’t have insurance.
So what are you waiting for? Insure today to protect your peace of mind.
Get one or all of the coverage available! Please tell us your preferred coverage, and we will get back to you with insurance your quote in no time! With Perla Insurance, know that you are our number one priority.
As one of the best insurance companies in the Philippines, Perla Insurance would like to keep our audience educated on important insurance-related matters as this vital information can be lifesaving.
We have a series on YouTube called Perla Cares, where we make bite-sized animated videos that can be easily comprehended by our viewers, and we explain these crucial concepts in easy wordings and phrases.
To watch our videos on similar topics, check out the links below:
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At Perla Insurance, we genuinely care for our customers, and we strive to prove that we provide the best car insurance in the Philippines through community-driven efforts and by putting you first.
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Also Read: What Do You Do When You Meet An Accident?