Wheels of Jus­tice

In­sur­ance and trav­el­ing cars

Top Gear (Philippines) - - Contents - WORDS BY ROBBY CONSUNJI

Ques­tion: I had my car insured in Cebu City and I plan to use it to travel to Manila. In case of an ac­ci­dent, would it still be cov­ered by the in­sur­ance pol­icy?

Yes, your car in­sur­ance se­cured in Cebu City cov­ers ac­ci­dents that may oc­cur any­where within the Philip­pines. It cov­ers dam­age or loss oc­cur­ring on a pub­lic road as well as dur­ing tran­sit by in­land wa­ter­way or el­e­va­tor. How­ever, it does not cover dam­age or loss oc­cur­ring on board an in­ter-is­land ves­sel. Your car in­sur­ance ceases to be ef­fec­tive when the car is in tran­sit by in­ter-is­land ves­sel or by air­craft.

As a gen­eral rule, car in­sur­ance cov­ers the use on pub­lic roads or high­ways, in­clud­ing thor­ough­fares, boule­vards, drive­ways, av­enues, parks, al­leys, and side streets. Read the car in­sur­ance pol­icy to know the ex­tent of the cov­er­age, or ask your in­sur­ance provider for de­tails be­fore en­ter­ing into an in­sur­ance con­tract. You must also con­sider what type of risk and pro­tec­tion you need be­fore in­sur­ing your car.

The law pro­vides that “every owner of a mo­tor ve­hi­cle shall be insured by fil­ing with the proper gov­ern­ment of­fice a bond to an­swer for dam­ages to third per­sons. The amount of the bond and other terms shall be fixed by the com­pe­tent pub­lic of­fi­cial.” (Ar­ti­cle 2186, Civil Code)

The law also states that “it shall be un­law­ful for any land-trans­porta­tion oper­a­tor or owner of a mo­tor ve­hi­cle to op­er­ate the same in the pub­lic high­ways un­less...there is a pol­icy of in­sur­ance to in­dem­nify the death, bod­ily in­jury, and/or dam­age to prop­erty of a third-party or pas­sen­ger. (Sec­tion 387, In­sur­ance Code, Repub­lic Act No. 10607)

The In­sur­ance Code also makes it clear that “the LTO shall not al­low the reg­is­tra­tion or re­newal of reg­is­tra­tion of any mo­tor ve­hi­cle with­out first re­quir­ing from the land-trans­porta­tion oper­a­tor or mo­tor-ve­hi­cle owner con­cerned the pre­sen­ta­tion and fil­ing of a sub­stan­ti­at­ing doc­u­men­ta­tion in a form ap­proved by the LTO ev­i­denc­ing that the pol­icy of in­sur­ance or guar­anty in cash or surety bond re­quired by this chap­ter is in ef­fect.” (Sec­tion 389)

Com­pul­sory Mo­tor Ve­hi­cle Li­a­bil­ity In­sur­ance (CMVLI) or Com­pul­sory Third Party Li­a­bil­ity (CTPL) is the manda­tory in­sur­ance you need for an­nual ve­hi­cle reg­is­tra­tion with the LTO. With­out CTPL, it is un­law­ful to op­er­ate a car or mo­tor­cy­cle on a pub­lic road.

In a CTPL pol­icy, the in­sur­ance com­pany agrees to pay up to P100,000 to a third party for death in an ac­ci­dent caused or aris­ing out of the use or op­er­a­tion of the insured car, while pay­ment for hos­pi­tal­iza­tion and/or bod­ily in­jury de­pends on the in­juries suf­fered and hos­pi­tal­iza­tion ex­penses. It does not in­clude loss or dam­age to prop­erty of a third party, de­fined as “any per­son other than a pas­sen­ger and also ex­cludes mem­bers of your house­hold, mem­bers of your fam­ily, and your em­ploy­ees in the course of em­ploy­ment.” (Sec­tion 386, In­sur­ance Code)

If you want extra pro­tec­tion, you can ask your provider for other types of in­sur­ance cov­er­age you can get on top of your ba­sic car in­sur­ance: Com­pre­hen­sive In­sur­ance, Acts of Na­ture or Acts of God, Auto Li­a­bil­ity In­sur­ance, Pas­sen­ger Per­sonal Ac­ci­dent In­sur­ance, and Marine In­sur­ance.

Com­pre­hen­sive In­sur­ance of­fers pro­tec­tion against theft, van­dal­ism, fire, ri­ots, ex­plo­sions, wind­shield and glass dam­age, fall­ing trees and other ob­jects, ob­jects kicked up by or fall­ing off cars, storms, hail, wind, floods, light­ning, and earth­quakes as well as ac­ci­dents with an­i­mals. As there is no stan­dard com­pre­hen­sive cov­er­age among in­sur­ance providers, it is best to read the fine print of your pol­icy to know which risks are in­cluded and ex­cluded in your in­sur­ance cov­er­age.

Acts of Na­ture or Acts of God (AOG) car in­sur­ance is an op­tional add-on cov­er­age on top of the Com­pre­hen­sive In­sur­ance and CTPL for your car. It would help pay for the re­pairs in case your ve­hi­cle got dam­aged dur­ing a catas­tro­phe that was un­pre­dictable, un­avoid­able, or un­con­trol­lable. When buy­ing a brand-new car through fi­nanc­ing, the lend­ing bank will likely re­quire you to se­cure AOG car in­sur­ance first be­fore the ve­hi­cle is even re­leased to you.

Auto Li­a­bil­ity and Pas­sen­ger Per­sonal Ac­ci­dent In­sur­ance pro­vides pro­tec­tion not just for third par­ties but also for the pas­sen­gers of the insured ve­hi­cle. The for­mer cov­ers li­a­bil­i­ties aris­ing from dam­age to some­one else’s ve­hi­cle or prop­erty, and bod­ily in­jury or death to a third party; the lat­ter is for the pro­tec­tion of pas­sen­gers, in­clud­ing the driver of the ve­hi­cle, against bod­ily in­jury re­sult­ing in death or dis­able­ment caused by an ac­ci­dent while op­er­at­ing, rid­ing in, board­ing, or alight­ing from the insured ve­hi­cle.

Fi­nally, Marine In­sur­ance is nec­es­sary if you will trans­port your car from Cebu City to Manila on board a ves­sel. It in­cludes “in­sur­ance against loss of or dam­age to ves­sels, craft, air­craft, ve­hi­cles, goods, freights, car­goes, mer­chan­dise...in re­spect to, ap­per­tain­ing to, or in con­nec­tion with any and all risks or per­ils of nav­i­ga­tion, tran­sit, or trans­porta­tion.” (Sec­tion 101, In­sur­ance Code)

For full pro­tec­tion in case of any ac­ci­dent or mishap, you should con­sider get­ting a Marine In­sur­ance for your in­ter-is­land travel from Cebu City to Manila.

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