Types of Car Insurance You Should Know About

Paulo Abad

Finance Lifestyle

Jan 18, 2020

Not only is a car insurance a necessity these days, but it’s also a very important and useful tool that can help you get out of sticky financial situations. Thus, if you own a car (or planning to own one), best invest in a good auto insurance package. To help you out, below are the different types of car insurance available today.

Compulsory Third Party Liability

Third party liability (TPL) is the basic car insurance available to private car owners. It allows the policyholders to financially cover any vehicle-related wrongdoings they made to other people (excluding their passengers, drivers, or family members). Third party liability insurances fall under two categories: Compulsory and Voluntary. Compulsory TPLs are less expensive and the law requires every Pinoy vehicle owner to get this insurance before registering their car.

Voluntary Third Party Liability

Meanwhile, voluntary TPLs provide additional financial coverage by allowing holders to compensate for damages they inflict upon third party vehicles or properties in case of accidents. It is also known as property damage insurance, and it can be paired with the CTPL for better overall protection.

First Party Insurance

First party insurance aims to cover the expenses incurred from damages inflicted upon the policy holders and/or their passengers in the event that they get into an accident. This type of insurance comes in many forms, and it is highly useful in the following circumstances:

  • When the accident wasn’t the policy holder’s fault.
  • When both parties weren’t at fault.
  • During hit-and-run situations (the driver at fault wasn’t there).
  • When the driver at fault doesn’t have enough money to cover all the expenses.

Comprehensive Car Insurance

Generally speaking, privileges enjoyed by comprehensive car insurance holders include most of the basic coverages of the insurances listed above. However, if you want more financial protection for your car, you can always request additional benefits. Many car insurance companies offer unique add-ons in the insurance packages, which can come in handy in situations like:

  • Damages made while your car is being shipped or moved by a rail, lift, etc.
  • Damages caused by fire or explosion caused by external sources or self-ignition.
  • Damages created due to accidents during transporting the vehicle (i.e., hitting a post or a stationary vehicle).

Get Car Insurance

Making sure that you have auto insurance is a basic yet important requirement for driving a vehicle in the Philippines. So if your old car isn’t insured yet, now’s the time to start looking for a good package.