Why You Need Car Insurance

By Randell Tiongson on April 26th, 2016

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In 2010, payment for Acts of Nature insurance increased by 11.5%, from Php 12.1 billion in 2009 to Php 13.5 billion in 2010, a year after tropical storm Ondoy hit the country. After the destruction the storm left, more Filipinos saw the value of car insurance, particularly the Acts of Nature coverage, which is insurance provided for damages cause by natural occurrences, such as floods, typhoons, earthquakes, and the like. As a whole, car insurance, which includes Acts of Nature coverage, provides multiple benefits to car owners.

Here are 3 reasons as to why you need car insurance if you don’t have one yet, or are unsure whether you need one.

To protect yourself

Vehicular accidents can cause a strain not only on your pockets but your emotional well-being. Having car insurance in the event of a car accident gives you the peace of mind that you have the capacity to cover the damages. Whether you need Php 20,000 to replace your bumper or a million Pesos to buy a new car if your old one is totaled, having a car insurance policy takes away the stress from having to shell out money during an accident. Imagine having to deal with an irate car owner whose vehicle you hit, shelling out money to cover repairs, and carrying on with life sans your vehicle which you use on a daily basis. Car insurance offers stability and gives you the peace of mind that you can handle unfortunate car-related instances that come your way.

To protect others

Comprehensive Third Party Liability (CTPL) insurance is a requirement of every motor vehicle before it is registered with the Land Transportation Office (LTO). CTPL provides protection to passenger-victims and third-party victims and offers death benefits, funeral expenses, and hospital reimbursements. In the unfortunate event that you experience a minor (or major) accident and are liable for the injuries you caused to passengers or non-passengers affect in the collision, your CTPL provides financial assistance to cover incurring costs.

To protect your vehicle and pockets

Regular car maintenance does add up. A single part replacement will cause you from the low- to the high-thousands depending on the damaged part. What more if your vehicle needs major repairs or a replacement? This will cost you in the hundreds of thousands and even in the seven-digit range depending on your vehicle and the damages. MoneyMax.ph, a financial comparison website for car insurance, wrote an article entitled, 3 Real-Drivers Saved by Car Insurance, wherein in one account, Rowyn, an owner of a Montero Sport which hit a taxi which then collided with an Isuzu, was given Php 500,000 by her insurance provider for paying Php 9,000 in annual premiums. If you had to shell out Php 500,000 for car repairs and damages, where will you get the money if you didn’t have car insurance? How much of a strain will that cause to your emergency funds? As mentioned above, car insurance provides you with financial security. You may be paying your coverage monthly, but in the event you need to make a claim, your annual premium is loose change compared to your coverage.

What now?

For those looking for financial security, car insurance, and life and non-life insurance in general, takes you one step closer to financial stability. Having insurance protects your emergency fund and other financial accounts you have because in the event you need a large amount of cash, your insurance policy will give you the coverage. Unlike if you didn’t have insurance, one unfortunate accident can wipe more, if not all, your savings. If you’re thinking of insuring your car, MoneyMax.ph provides a personalized platform where you can filter different insurance policies according to your specific car make and model. It’s best to use comparison websites first before applying for a policy so you can do your research and find the most affordable and beneficial coverage for you.

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5 Car Insurance Mistakes Pinoys Make

By Randell Tiongson on November 20th, 2015

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The Philippines ranks in the top 10 globally of consumers intent on purchasing a car in the next two years according to the Nielsen Global Survey of Automotive Demand. Another interesting fact is that the Philippines ranks highest globally among current car owners intending to upgrade their cars. With the automotive industry in the country booming – the year-on-year car sales for the month of January 2015 increased by 19.3% according to CAMPI* –this means that more cars on the roads equals higher chances for accidents. Unfortunately, there’s no way to tell when an accident will strike, no matter how prepared we are. Aside from driving defensively, the best way to protect ourselves on the road is to have car insurance.

I talked to a MoneyMax.ph representative, the Philippines’ leading comparison platform for car insurance, on the need-to-know when buying one. A common fact I received is that many prefer to get the lowest premium even if this is not always the best choice. Read on to find out common car insurance mistakes Pinoys make when shopping for such:

  1. Using price as the determining factor

Monthly premium payments for car insurance can take up a portion of our monthly budget. We know the importance of insurance, so people apply for insurance just for the sake of having insurance and thus settle for the most affordable price. Settling for the cheapest option can be a mistake when you’re not getting the coverage you need. Make sure that before you agree to an insurance policy and its pricing, read the entire policy from front to back. Ensure that everything you agreed on with the adviser is stated in the policy. Coverage you may look for includes the following: road assistance, legal assistance, and acts of nature coverage.

  1. Undervaluing your car to get a smaller premium

Say your car has a fair market value (FMV) of Php 1 million, but you prefer to value it at Php 800,000 to get a lower insurance premium. You may save on your monthly insurance payment, but in the unfortunate event that you get into an accident and your car is totaled, you may not be able to get the total coverage fit for your million-peso car. This is because a lower premium payment will you give you insurance coverage for a vehicle of lower FMV. When buying car insurance, it’s best to state the full FMV of your vehicle to get complete insurance coverage.

  1. Failing to research and shop around

Shopping for car insurance, be it online or hopping from one broker to another, may be tiresome. Visiting one webpage to the next can take up a chunk for your time, and you may find yourself experiencing analysis paralysis with all the information you’ve found. Now, you need to find the best deal for you. This may be tiring, but it’s best to research and shop around if you want to get the best deal. This is the beauty of financial comparison websites, such as MoneyMax.ph. You have everything you need in one place, just like a department store. Using comparison platforms will give you the information you need – in this case, car insurance coverage from the country’s leading providers – all in one page. It definitely pays to do your research.

  1. Not considering additional coverage

Additional coverage may include roadside assistance, fire and external explosion protection, and an Acts of Nature coverage which protects your car against natural disasters. It’s best to discuss your insurance application in full detail with your agent. This way you can ensure that you’re getting complete coverage for an affordable price. With the Philippines experiencing an average of 20 typhoons a year, you may consider an Acts of Nature coverage which covers you from natural disasters, such as typhoons, floods, and earthquakes among others.

  1. Forgetting to ask for a discount

Car insurance rates vary depending on the type of driver you are. If you have a squeaky clean driving record, don’t hesitate to ask your agent for a discount on your insurance. You might just be able to shave a few pesos off your monthly payments. This is because having a good driving record and having safe driving habits make you less likely to get into an accident and make an insurance claim. If you believe that you won’t be claiming your car insurance on a regular basis, don’t hesitate to ask for a discount.

Need for speed

Driving a car gets us from points A to B in the fastest and most convenient way possible; however, it’s best to be safe. This means driving safely and having the peace of mind that you’re protected with car insurance. I hope that my chat with MoneyMax.ph was able to help you.

 

*Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI)

 

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Do we really need car insurance?

By Randell Tiongson on August 8th, 2015

Question: My wife and I just bought our first car and we need help choosing the right car insurance. Is the basic CPTL insurance offered by the LTO enough? Or is it worth buying a comprehensive car insurance? If we choose the latter, what are the things we should be looking out for? –John Santos via Facebook

Answer: Congratulations on the new car! It’s natural to feel unsure and overwhelmed when buying car insurance for the first time. Let me guide you through the process.

One person died in this three-car crash. (KATU News photo)When you register your car with the Land Transportation Office, you are required by law to get basic Compulsory Third Party Liability (CTPL) car insurance to protect against possible liabilities to third parties. According to the Insurance Code of the Philippines, a third party is defined as any person other than a passenger, family member, or household member of the vehicle owner.

In other words, CTPL protects pedestrians from potential damages or injuries that arise from the use of the insured car. This is compulsory and covers any bodily injuries or deaths caused for of up to P100,000. However, CTPL does not cover loss or damages to property, and is very limited in this regard.

Many non-life insurance providers also provide comprehensive car insurance. Essentially, comprehensive car insurance has a wide coverage and insures you against damage, car theft, liabilities caused by collisions, fire, malicious acts, acts of God (and nature) and personal accident insurance of the passenger. While this is not mandatory, it provides some measure of financial security by covering car repairs and other damages should any unfortunate incidents occur.

It’s smart to get this type of insurance because risk is an everyday reality. Accidents can happen to you anytime, and if you’re driving to work every day, you’re exposed to risks that you do not have direct control of.

To illustrate, EDSA accommodates more than two million vehicles on a daily basis. If you take Edsa to work, you’re exposed to more than 27,000 public utility buses that figure in the worst traffic accidents.

Another good reason to get comprehensive car insurance is the fact that the Philippines endures an average of nine tropical storms in a year. It’s like saying your car is at major risk at least nine times in a year! I have a lot of friends who had damaged cars during the worst flooding in Manila. Those who had Acts of God or Acts of Nature in their policy were well-taken care of by their insurance providers.

If any of these unfortunate incidents makes your car inoperable, comprehensive insurance picks up the tab for repairs and does all the legwork for you. So instead of doing the paperwork and trying to get them stamped at one government office after another, the insurance company will take care of all this. Depending on your coverage, they’ll even foot the hospital bills in case any passengers got injured in the accident.

When getting your car insurance, make sure that you read the fine print and understand what’s included and what isn’t. Many “comprehensive” insurance policies don’t insure against all types of damages, like riots or typhoons. Coverage for these instances will require additional clauses:

Acts of God or Acts of Nature covers damage from flooding and other non-manmade incidents

Personal Accident provides a small amount for any injuries sustained during a road accident

Medical Reimbursement lets you reimburse medical expenses from injuries related to the accident

Other add-ons include riot (for protest or riot-related damage), upgrade (for upgraded car equipment), roadside repairs and towing

Before including these add-ons to your coverage, determine how and where you use your car. For example, if you live in a flood-prone neighborhood, the Acts of God clause is worth paying for. If you drive to work daily, it’s safe to include the Personal Accident or Medical Reimbursement additions.

Get to know the top car insurance providers in the Philippines and see what coverage they have to offer. As a shortcut to your research, there are several websites offering comparisons among the car insurance packages of various providers. A good comparative website you can use is  Moneymax.

These websites will give you quotes from four or more companies, and do a side-by-side comparison. This makes it easier for you to analyze your options and make your choice based on price and your own needs.

Make sure that you compare premiums fairly and objectively before making your final choice. Some insurance companies may offer very low rates, but the claiming process can be difficult.

Ask your friends which providers they are using and find out how easy or difficult the claims process was. Personally, I don’t mind paying a few pesos more if my insurance provider rescues me during my time of need.

Be safe, be secured.

 

 

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