BASIC COVERAGE OF THE MOTOR CAR INSURANCE POLICY

1. Compulsory Third Party Liability (CTPL)

1. It is a pre-requisite for motor car registration.

2. Standard amount of coverage of CTPL is PHP 100,000.00

2. Loss or Damage ( Actual Amount of Vehicle / Fair Market Value )

The Insurance company will undertake to cover the insured against loss or damage to
the insured vehicle including its declared accessories (built-in) resulting from:

1. Accidental collision
2. Fire , external explosion
3. Malicious act
4. Damage while on an inland transit

3. Excess Bodily Injury (EBI) – (Death/ Bodily Injury)

In case the limit of liability for CTPL has been exhausted, this section will cover the
excess subject to the provision of limits stated therein.

4. Excess Liability Insurance (Property Damage)

Covers liability of the Insures against damage to third party property, subject to the
limits and provisions of the policy.

5. Personal Accident
Refers to the insurance, which provides benefits/ indemnity in case of loss/or to the life
or well-being of a person arising out of an accident.

MOTOR CLAIMS REQUIREMENTS

1. Report the accident to the Motor Car Claims Department / Insurance Company
2. Submit the following documents for the early Processing and settlement of Claim

FOR OWN DAMAGE CLAIM

1. Photocopy of LTO Registration Certificate and latest O.R./ Notice of Accident

Report
2. Photocopy of Drivers License and O.R.
3. Police Reports or Affidavit of Damage duly notarized
4. Photocopy of Comprehensive Insurance Policy with O.R. of premium payment
5. Repair Estimates
INSURANCE
Insurance companies, as part of their protocol, ask their clients to cough up money for
participation.

What does “participation fee” mean and why is it important in making claims? Here are
some things you should know.

What is a participation fee?

A participation fee is the amount billed by insurance companies to their clients

whenever they make an insurance claim. If the policyholder would like the insurer to
cover the cost of repairs or other types of damages such as bodily injury, the latter will
invite the former to “participate” in shouldering the expenses stemming from the
insurance claim.

Why do insurance companies charge participation fees?

There are three main reasons insurers require clients who file for auto insurance claim
to pay participation fees.

First—and this is more common in comprehensive insurance policies with own damage
clause–the driver has a liability in any accident, which means that he should also be
charged by a fine for participation. Second, deductibles will deter policyholders from
making petty claims that are below the minimum insurable claim. Finally, participation
fees will prevent fraudulent claims that will cause serious financial trouble to the
company.

How much do insurers usually charge for participation fees?

Despite qualms that participation fees will render the insurance policy useless since
they will also ask the policyholders to pay a fee, the deductions for such is not as big as
what people think.

Most insurance companies will ask you to pay out-of-pocket costs before they cover the
rest of the expenses based on your car’s type and market value:

 For smaller vehicles, policyholders are usually billed 0.5 percent of the car’s total
market value as participation fee.
 Meanwhile, insurers ask owners of bigger vehicles such as vans and trucks to
pay one percent of the car’s market value as deductible.
For instance, a sedan with a current market value of P800,000 with repair expenses
totaling P70,000 will have the following figures for participation fee:

 The car’s deductible will be P4,000 based on the 0.5 percent participation fee
rate of the car’s market value, which is P800,000.
 Meanwhile, the total amount to be shouldered by the car insurance company will
be P66,000, which is the total repair cost (P70,000) minus the participation fee
(P4,000).
 Other insurance companies charge private and commercial vehicles with a
participation fee of P2,000 and P3,000, respectively.

How does car depreciation come into play?

Insurance companies will ask the policyholder to shoulder a certain percentage of the
parts that need to be replaced to get the vehicle back in good running condition. To
determine the rate of parts costs insurance holders, they use the handy depreciation
guide for the following rates:

Brand new up to three years old Exempted from depreciation fee

Three years and one day up to four years 20 percent of the parts value

Four years and one day up to five years 25 percent of the parts value

Five years and one day up to six years 30 percent of the parts value

Six years and one day up to seven years 35 percent of the parts value

Over seven years 40 percent of the parts value