VEHICLE INSURANCE MUST MATCH REGISTRATION MONTH

To avoid coverage duplication, the Insurance Commission (IC) has ordered motor vehicle insurers to make insurance policies coterminous with the month of registration of covered vehicles.

Insurance Commissioner Dennis Funa issued circular letter (CL) no. 2021-54 laying down the guidelines to synchronize the period covered by comprehensive motor car insurance policies with the registration dates of those vehicles.

“This CL aims to address the concern of the Anti-Red Tape Authority (Arta) as regards the perceived redundancy of the requirement of getting compulsory third-party liability insurance (CTPL) when a motor vehicle is already covered by a comprehensive motor car insurance policy,” Funa explained in a recent statement.

Synchronization

A CTPL insurance policy is required when registering a motor vehicle with the Land Transportation Office (LTO), whether for commercial or personal use. It is meant to provide protection to the riding public.

Funa said that under CL 2021-54, “motor car insurers are now required to ensure that the period of coverage of all motor car insurance policies issued containing CTPL cover shall be coterminous with the month of the registration of the insured vehicle ... regardless of whether such policies are stand-alone CTPL policies or comprehensive motor car insurance policies with CTPL provisions.”

In particular, Funa said insurers must “allow for the extension of the period of coverage of comprehensive motor car policies with CTPL cover to synchronize the period of coverage with the month of the registration of the insured vehicle, as indicated by the last digit of said vehicle’s plate number.”

Avoiding redundancy

“Insurers and their agents are also obliged to inform the insured that the respective periods of their comprehensive motor car policies with CTPL cover may be extended at the latter’s option, as well as the terms of such extension,” the chief added.

So the public can easily transact with the LTO, Funa said insurers issuing motor car policies must ensure that the government agency could authenticate in real-time the confirmation of cover it provided, both for comprehensive motor car policies with CTPL provisions as well as stand-alone CTPL policies.

“[This] aims to ensure efficiency in the registration or renewal of registration of motor vehicles, as well as to avoid redundancy in the coverage of motor car insurance policies,” Funa said.

Funa said CL 2021-54 had undergone consultations with the Arta, the LTO and the nonlife industry group Philippine Insurers and Reinsurers Association prior to its issuance.