Car Insurance Calculator

Autofun Philippines believes in helping car and motorcycle owners become responsible and informed motorists. That is why we compiled the essential information you will need to address one of the most important costs in car ownership - car insurance.

Here's a basic outline of the topics you should know. These will help you understand how car insurance works, and what you should do in order to have yourself ready for any driving eventuality. 

What is Car Insurance?

Car insurance basics

Why is car insurance needed?

Choosing a car insurance company

Kinds of car insurance

  Comprehensive insurance

  Compulsory Third Party Liability (CTPL)

  Voluntary Third Party Liability (VTPL)

  Acts of God/ Acts of Nature

Thrifty car insurance tips

Essential things to do after an Incident

Filing an insurance claim

What is car insurance?

Car insurance is effectively a contract between yourself and an insurance company where you have agreed to pay an annual premium in exchange for protection against financial losses stemming from an accident or other damage to your vehicle and the other vehicle involved. Here in the Philippines, the minimum kind of car insurance that every vehicle owner is required to have is Compulsory Third Party Liability Insurance (CTPL), which covers the death and injury of third parties but minimally covers the driver and its passengers. The other most commonly availed insurance policy is the Comprehensive Insurance with Acts of God, which provides coverage for the driver and passengers, including the third party. You can even file a claim if you damage the car yourself. The Acts of God, now more commonly known as Acts of Nature (AON), cover damages caused by natural disasters.

Car insurance basics

Here’s a brief rundown on some of the basic terminologies that you will encounter in a car insurance policy

First Party

The owner of the vehicle, who has availed of the insurance policy

Second Party

The insurance company providing the policy to the first party

Third-Party

Any party/person involved in an accident with the first party and is making a claim against the first party.

Why is car insurance needed?

Every car owner needs car insurance in the Philippines as it is mandated by law to be able to drive their vehicle on a public road legally. But what makes car insurance so important is that it serves as a financial reassurance, just in case you're involved in an accident or the vehicle is stolen, vandalized, or damaged by a natural disaster. Instead of paying directly from their expense, car owners pay annual fees or premiums to a car insurance company. In return, the car insurance company then pays all or most of the cost associated with the auto accident, such as damages to the vehicle or another driver's vehicle, property damage or bodily injuries caused by the accident, and more, depending on the car insurance coverage.

Choosing a car insurance company

There are about a hundred or so non-life insurance companies in the country. Based on their gross premiums, our country's top ten car insurance companies account for more than half of the market share. But despite their strong presence in the market, there are still a lot of small and medium-sized legitimate and “fly-by-night” illegitimate car insurance companies that continue to do business. This makes choosing a particular car insurance company quite tricky and deceiving. As such, it is highly recommended that you look at the track record of the car insurance company you wish to deal with. This is necessary to give you an idea of how professionally they deal with their clients, especially when filing claims.

Here are a few pointers to keep in mind to help you choose the right car insurance company for you:

• Ask around. It’s surprising to see how valuable information one can get from someone who has already dealt with a car insurance company. Their first-hand experience can reveal how difficult or easy it is to deal with certain insurance companies.
• Please seek advice from owners of auto repair shops accredited by various insurance companies. They know exactly who is the easiest and the most difficult to deal with.
• Ask for a list of their accredited auto repair shops and take the time to personally check out the facilities of the ones nearest your home or office workplace.
• Inquire about their standard procedure when filing claims and what pertinent documents must be submitted.

What sort of freebies does it come with? Many car insurance companies today offer 24-hour roadside assistance and much more.

Suppose you have any doubts as to the legitimacy of a particular car insurance company. In that case, you can check through the Philippine Insurance Commission to confirm the company's status and if any pending cases are filed against them.

Kinds of car insurance

There are different kinds of car insurance coverage available. But the most common ones are:

• Comprehensive insurance
• Compulsory Third Party Liability (CTPL)
• Voluntary Third Party Liability (VTPL)

While most auto insurance types are essential, especially on new cars, some added or add-on policies are no longer applicable for older vehicles that are not used daily. Awareness of the various kinds of car insurance is the first step in ensuring that you and your assets are protected. But this also means you’re not carrying more coverage than you need.

Comprehensive insurance

It’s important to remember that comprehensive car insurance does not cover damage from a car accident. For that, you’ll need a collision insurance policy. But what about everything else that could go wrong? What about fire or theft? That’s what comprehensive auto insurance is for.

The coverage you get with a comprehensive auto policy will vary from company to company. And it will depend on how much you spend on your policy. But in general, a comprehensive auto policy will cover: Fire, Vandalism, Theft, and Disasters in some cases, depending on the insurance company, “Acts of God” like a tree falling on your car. Such causes may vary among insurance companies, so be aware of what’s written in your policy.

Go over how your comprehensive insurance is structured; it is most likely to be focused on own damage and theft. This means that most of the insurance that you’re paying for actually goes towards protecting your vehicle.  Ask yourself, what is your goal behind getting insurance? Is it to protect your car against damage, or is it to protect you against your liability toward a third party?

Comprehensive insurance policies have deductibles — the amount of money you have to pay before your insurance company picks up the bill. But you might end up paying a lot out of your pocket if you ever file a claim. If you have to file a claim, your policy will pay up to your car's fair market value/depreciation value. That could be much less than the actual cost of replacing your vehicle.

Depreciation and your car

Depreciation is based on the original value of the car. Remember that this is not a valued policy. It is only valued at the time when the car was insured. Most insurance companies don’t have a depreciation rate for vehicles three years old or below. However, there is a standard depreciation table (This assumes that the car is in good condition and properly taken care of)

• 3-4 years old = 20% of its original value
• 4-5 years old = 25% of its original value
• 5-6 years old = 30% of its original value
• 6-7 years old = 35% of its original value
• Over 7 years old = 40% of its original value

Here in the Philippines, though, there is only one rate, unlike in the States, where all American insurance companies take into account the driver's age, driving records (if any), and traffic violations. This is more of a tariff system, as the underwriter has the discretion on the amount of surcharge to be posted on the client.

Compulsory Third-Party Liability (CTPL)

This is the most basic form of car insurance coverage required by law for registering all vehicles in the Philippines. Duly mandated by the law, most car owners are too familiar with it, but did you know it’s also the most misunderstood?

You see, basic CTPL only covers liabilities from accidents resulting in death, disablement, and medical expenses of a person injured by an accident involving your vehicle. This excludes members of your household or members of your family within the 2nd degree of consanguinity. The aforementioned persons' coverage is covered by Voluntary or excess third-party liability coverage. This coverage is added to your basic CTPL at an added premium, of course, and most car insurance companies have many of these specialized features that will suit your needs.

Here are some additional car insurance coverage features that can be added in addition to your basic CTPL:

• Excess bodily injury
• Property Damage
• Auto Personal Accident
• Standard Accessories Cover
• Additional Valuable Accessories

Since the CTPL is the most basic form of car insurance, it also generates much revenue for most insurance companies.  It is roughly estimated that it amounts to PHP 2.4 billion annually at an average of PHP 600 per policy. This explains the proliferation of fraudulent insurance companies that prey on unsuspecting car owners.  Be wary of the car insurance company that you’re getting your CTPL to prevent yourself from getting scammed.

Voluntary or Excess Third Party Liability (VTPL)

This protects you just in case your vehicle damages other peoples' properties and covers all liabilities towards the third party. Most insurance companies offer this coverage inclusive of their comprehensive insurance policy. This explains the absence of internal limits, which means that you can dictate how much, is to be assigned for property damage and third-party liability.

VTPL’s also relieve you of having to deal with the third party as the insurance company takes care of it, and you won’t have to be hassled by someone bugging you to pay this and that.

Acts of God

Many Filipinos will forever remember Typhoon Ondoy as one of the worst typhoons to ever hit the country. The aftermath was even more devastating as many lives were lost, and property damage was immense. As the waters subsided, scores of houses were drenched in mud while vehicles were overturned every which way.  This damage not only dealt a hard blow on their owners but likewise brought up a sad reality—that despite most properties being insured for damage, such wasn’t enough as they weren’t covered by a clause known as Acts of God.

Suddenly, Acts of God (or AOG) became the day's buzzword. Many companies claimed they already offered such a clause in their insurance policies. Others that didn’t have it suddenly made it standard fare. Amidst all this talk, one tends to ask: what exactly is the Acts of God clause, and what does it cover?

Acts of God (AOG) or Acts of Nature (AON) insurance can be described as a cover against damages brought about by natural calamities. It is usually applied as an extension to the standard automotive and property insurance policy. For instance, the automotive insurance AOG clause protects against calamities like floods, typhoons, earthquakes, volcanic eruptions, hurricanes, and other forces of nature. As many have learned, AOG is an extended coverage that requires an additional premium over the standard insurance premium. It is usually computed based on the applicable rate multiplied by the value of the vehicle/property.

And just like traditional insurance, the AOG cover also has limits. These limits follow the property limits, i.e., the sum insured or assessed property value. Anything beyond that is your responsibility. Despite the hard lessons learned, many people still refuse to get AOG cover for the simple reason of cost. To them, it is an added expense.

Thrifty auto insurance tips

Here are some tips that could save you a considerable amount of money but also help instill a healthy working relationship with your car insurance company.

• Get a certificate of no claim before renewing your policy. Doing so might enable you to avail of a discount or rate adjustment in your succeeding policy.
• Build a reputable track record history by sticking to one particular car insurance company. This way, they’re more likely to be pressed to offer a little leeway regarding rates or claims.
• Always present your vehicle for inspection immediately before or after purchasing a car insurance policy to prevent disputes regarding future damage claims.
• Only get what you need, so don’t overindulge. Remember that the value of your vehicle is determined at the time of the incident and not by its actual value. And that’s exactly the amount you will be getting in case of total loss or theft. They’ll also be factoring the depreciation value on top of it.
• If you decide to sell the vehicle and opt not to include the car insurance policy, you can get a refund on your premium. The refund, though, is not pro-rated, which means that a short rate table of cancellation will be used to compute whatever refund you are entitled to.

Essential things to do after an incident

Accidents can happen anytime and everywhere, and despite all our efforts to be careful drivers, it does not make anyone immune from such mishaps. Always maintain a strong presence of mind and a basic knowledge of what to do. Collectively, these can all help make the experience less traumatic and lessen the chance of unnecessary complications. Here are some things to remember when that dreaded moment actually happens.

Check for injuries on yourself and those persons involved. Remember, life and health are more important than damage to vehicles.

Write down the names, addresses, license plates, and contact numbers of the persons involved in the incident.  In addition,Call the police even after a minor incident to obtain a police report and other documentation needed when filing a claim.

Filing an insurance claim

All car insurance companies have procedures and requirements when filing for a claim, so remember to inquire about the ins and outs of such procedures with your car insurance company before even signing up to avail of their policy to prevent misunderstanding. The good news is that some car insurance companies have a hassle-free accident claims procedure, so inquire about such features if there are any.

The usual documents that almost all car insurance companies require are:

• Photocopy of your driver’s license
• Photocopy of your car’s Original Registration (OR) and Certificate of Registration (CR)
• Photocopy of your car’s insurance policy
• Police Report and Incident Sketch
• Notarized affidavit (This is needed if the circumstances are not clear in the police report)

Other things to keep in mind

Notify your car insurance agent immediately after the incident; they can guide you through the required procedure.

Do not sign any written document not unless it is for the police or your car insurance agent.