How To Guides
How To Guides
How To Buy A Motor Car Insurance
How To Buy A Motor Car Insurance
Road accidents are now the fourth leading cause of death in the country? Police records show that an average of 41 traffic accidents occur every day due to numerous reasons, among them driver errors, mechanical defects, over speeding, cell phone use while driving , driving under the influence of alcohol and drugs, etc.
So what does this tell you?
It tells you that it's really best to get insured. Here is a short guide on how to buy a motor car insurance.
So how do you start? Here's a list of things you should learn before buying a Motor Car Insurance.
COMPULSORY THIRD PARTY LIABILITY (CTPL) – The state (PD 612, Chapter VI) requires that before the registration and operation of any motor vehicle, it must be covered against liability for death and bodily injury of third parties. A Schedule of Indemnities for Bodily Injury &/or Death is contained in Sec I/II of a standard motor car policy.
OWN DAMAGE & THEFT (OD/Theft) – This protects against loss (theft) or accidental damage to the insured’s own vehicle.
VOLUNTARY THIRD PARTY LIABILITY – Excess Bodily Injury (VTPL-EBI) – This is the second layer to the CTPL coverage which provides additional insurance coverage (in excess of the P100,000 required by law). If you are found legally responsible for bills beyond the limits, you might find yourself in a situation where you have more out-of-pocket and in the long run, the cost could wipe you out. An example is when you run over a man who becomes permanently disabled.
VOLUNTARY THIRD PARTY LIABILITY – Property Damage (VTPL-PD) – This is additional coverage against liability due to the insured vehicle’s accidentally damaging a third party property. What if you had an accidental collision with luxury cars like BMW or Porsche, will your coverage be enough to cover the cost of damage?
EXTENDED PERILS COVER – For an additional premium, these perils may be added:
Acts of God – flood, typhoon, hurricane, volcanic eruption, earthquake (FTHVEE)
Strike, Riot, Civil Commotion (SRCC)
PERSONAL ACCIDENT – This covers against losses due to the accidental death or disablement and/or medical expenses of the vehicle occupants who are riding in the insured vehicle involved in an accident.
For an additional premium, you may opt for a Loss Of Use coverage (if offered by your provider) which provides transport allowance while your car is undergoing repair due to a motorcar claim.
DEDUCTIBLE – Deductibles represent the amount of money you pay before your insurance policy kicks in. The policy, be it a Private Vehicle (PV) Policy or Commercial Vehicle (CV) Policy, provides that the insured must share in the loss/damage – the expenses of the repair/reinstatement of the vehicle, equal to 1% of the sum insured for CV, and 0.5% for PV; Minimum deductible amount is P3,000 for CV and P2,000 for PV. This must be paid by the insured before the vehicle is released from the repair shop or by the insurance company.
DEPRECIATION – Depreciation is a decline in value caused by the effects of age, wear and tear, use, weather, and other similar factors. When a motorcar part is used to replace a damaged part, the insured has to pay the difference (amount) between the value of the part at the time the car has been purchased and the value of the part at the time it is replaced.
If you have comprehensive cover, it can shield you from legal liability to third party. Having car insurance does not stop anyone from suing you. But it does provide the assurance that if you are sued as a result of an auto accident, the financial and legal resources of the insurance company will assist you in defending against the suit and paying any resulting damages.