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What is the Standard Deductible and Depreciation Fee?

What is the Standard Deductible and Depreciation Fee?

Welcome to the topic “What is the Standard Deductible and Depreciation Fee for Private Cars, Commercial Cars, Motorcycles, and Public Utility Vehicles in the Philippines?

Car Insurance is an investment that needs thorough investigation and it is good to know what happens when you meet an accident that damages your car. Will you be liable to pay any fees for its restoration, or for replacement of any stolen parts of your car? It is important that you are given the accurate information so you know ahead of time what you can expect to pay.

We are here to give you a breakdown of these numbers.

Perla Insurance, one of the best vehicle insurance companies in the Philippines, is here to help you with any car insurance questions you may have. These instructional and informative blog posts, as well as our Perla Cares video series on YouTube, will provide you the answers to all these questions.

In this blog post, we go into this topic in greater detail and provide you with tables that will inform you of the different fees you may have to pay in case of an own damage or theft claim as part of your car insurance policy.

We will also be discussing how to compute your participation fees in car insurance in a later section in this blog post.

What is the Standard Deductible and Depreciation Fee?
What is the Standard Deductible and Depreciation Fee?

STANDARD DEDUCTIBLE

Below, we have provided a comprehensive table that shows the deductible fee you will have to pay for any claim for damage of your car according to the type of vehicle you own:

Vehicle TypeDeductible Fee
Private Cars (sedans, hatchbacks, 2-door sports coupe, etc.)Whichever of the following is higher:   0.5% of the sum insured or PHP 2,000
Commercial Vehicles (vans, SUVs, AUVs, etc.)Whichever of the following is higher:   1% of the sum insured or PHP 3,000
Public Utility VehiclesWhichever of the following is higher:   1.25% of the sum insured or PHP 4,000
MotorcycleWhichever of the following is higher:   1% of the sum insured or PHP 500

STANDARD DEPRECIATION

Given below, we have provided a comprehensive table that lists down the rate of depreciation charged for the replacement of parts for the different types of vehicles, based on the vehicle’s age in years.

Vehicle AgeDepreciation Fee for Private CarsDepreciation Fee for Commercial VehiclesDepreciation for Motorcycle
Up to 3 yearsNoneNoneNone
Over three years up to four years20%25%25%
Over four years up to five years25%30%30%
Over five years up to six years30%35%35%
Over six years up to seven years35%40%40%
Over seven years40%45%45%
Rebuilt and Reconditioned VehiclesN/A45%45%
Batteries, tires, ball joints, tie rods, and shock absorbers (for vehicles over three years old)45%50%50%

*Depreciation for Public Utility Vehicles

Vehicle AgeRate of Depreciation
First 6 months15%
Over 6 months to 1 year25%
Over 1 year to 2 years35%
Over 2 years to 3 years45%
More than 3 yearsDiscretionary

How To Compute Your Participation Fee In Car Insurance?

In this section, we will be going into the nitty-gritty details and methods used to compute your participation fees when it comes to your car insurance policy.

Compute Your Deductible Fee

The part of the insured’s claim against the insurance company that the insured pays is referred to as deductible fee. This fee applies to all claims made for damages or theft in your car.

The way to compute your deductible fee is given below:

  • Multiply your Car’s insured value by 0.5 % for private car (1% for commercial vehicle).  If the amount is higher than P2,000 (P3,000 for commercial vehicles), that will be your deductible fee. In the example below, the private car is insured for P1 Million.

SAMPLE COMPUTATION: 0.05% x P1 Million = P5,000

The amount of deductible is stated in your policy.

Compute Your Depreciation Fee

The age and depreciated value of the car are used to compute depreciation fees. A portion of the payment will be used to purchase new parts if your car is damaged. If there are no parts that need to be replaced, there is no depreciation fee.

The method used to compute your depreciation fee is given below:

  • Multiply the total cost for replacement part by the corresponding rate in your policy’s depreciation schedule. In this example, P10,000 was spent to purchase new parts and the private car is over 3 years but less than 4 years old.

NOTE: Skip this step if your private car, commercial vehicle or motorcycle’s age is less than three years.

SAMPLE COMPUTATION: 20% x P10,000= P2,000

Compute Your Participation Fee

When you make a claim with your car insurance carrier, you must pay a participation fee before the insurer can cover the remainder of the claim. The payment of a participation fee is one of the requirements for all claims for damage of your own car.

The method used is very simple and has been given below:

  • Simply add your deductible fee and depreciation fee (if any) to determine the participation fee you need to pay.

SAMPLE COMPUTATION: P5,000 (deductible fee) + P2,000 (depreciation fee) = P7,000

*Sample Computation is based on a three-year-old sedan with a fair market value of P1 Million, with P10,000 cost to replace parts.

Perla Insurance is proud to be the best car insurance company in the Philippines. We not only provide the best car insurance, but we also deliver the best value when you choose TPL Insurance or our various available coverage for Comprehensive Insurance.

Our Car Insurance packages are perfectly crafted, especially for you to set your mind at ease when it comes to protecting your automobile, yourself, and your loved ones.

Perla Insurance, like always, is deeply concerned about the well-being of our clients. As the best insurance company in the Philippines, we pledge to meet our customers’ needs by delivering nothing less than the best car insurance.

What is the Standard Deductible and Depreciation Fee?
What is the Standard Deductible and Depreciation Fee?

Youtube

Visit our YouTube channel, ‘Perla Insurance,’ to stay up to date on important topics related to car safety and insurance in the Philippines.

In our new Youtube video series, “Perla Cares,” we use straightforward language and easy-to-understand animated videos to answer frequently asked questions, keeping our viewers informed and making vital information more accessible to the general public from a trusted source, such as a well-known insurance company in the Philippines.

We also want our viewers to leave comments on topics they’d like to see covered in future videos so that we can give them the information they need.

Facebook

Please also like our Facebook page, “PerlaInsuranceOfficial,” as we are increasing our efforts to improve our community’s bond through increased interaction and engagement.

We’re also available to answer and elaborate on any insurance-related queries our community has.

If you choose to go with us for auto insurance, you may reach out to us on Facebook, and our staff will be pleased to provide you with additional information, lead you through the process, and explain the method in greater depth.

Perla Insurance is proud to be the best car insurance company in the Philippines. We not only provide the best car insurance, but we also deliver the best value when you choose TPL Insurance or our various available coverage for Comprehensive Car Insurance.

Our Car Insurance packages are perfectly crafted especially for you, to set your mind at ease when it comes to protecting your automobile, yourself, and your loved ones.

Perla Insurance, like always, is deeply concerned about the well-being of our clients. As the best insurance company in the Philippines, we pledge to meet our customers’ needs by delivering nothing less than the best car insurance.

We not only strive for the highest level of service quality but also for the most significant number of benefits, so you get the greatest return from your hard earned money. Remember – Perla Cares.

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Also Read: #GoodnessPerla

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