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Thursday, June 27, 2019

Tibaldo: Why LTO Requires TPL and not Comprehensive Car Insurance

ONE of the things that I accomplished this October is the registration of our family car with an ending plate of zero. Since it is still under its mortgage period, a Comprehensive Car Insurance is required by the car company so we had it enrolled on an auto debit payment scheme. During my transactions at the LTO Office in La Trinidad, I was told by the processing officer that a Third-Party Liability (TPL) insurance is required even if you already have a comprehensive car insurance.

The Land Transportation Office (LTO) being the agency responsible in licensing drivers and registering motor vehicle provides official documents to individuals to drive a motorized vehicle in the Philippines.

Since accidents happen regardless of how skilled a driver is, having a car insurance is one way to manage risk. Insuring a car would mean protection from unexpected expenses in case your car gets damaged, stolen, or when a rider and driver gets injured. Ideally, car insurance is meant to spare motorists from spending thousands on repairs or hospital bills. Further, it gives you peace of mind every time you hit the road.

So, how Does Car Insurance work? Car Insurance according to an insuring company is a contracted policy purchased by a vehicle owner where the insured pays a certain amount of premium in exchange for coverage given by the insurance company. The scope of coverage depends on the policy purchased. It can be as simple as coverage for bodily injury and death of a third party, to more complex protection against loss of property, personal injury, theft, and more. Philippine law requires all vehicle owners to purchase a compulsory Third Party Liability (TPL) insurance policy before they register or renew their vehicles at the LTO. TPL provides compensation to the third party in case of an accident. Comprehensive car insurance can also be purchased for extra protection, but isn’t required by law.

It means therefore that once registered with a TPL or Compulsory Third-Party Liability insurance (CTPL), the car user or owner is insured from indemnity or financial obligations to any third party who is injured or killed by the insured vehicle. As required by LTO, all vehicle owners in the Philippines must get CTPL coverage before they can register their vehicle to avail the minimum car insurance coverage needed to legally drive in the Philippines.

As stated in most CTPL policies, any liabilities incurred by the insured in terms of bodily injury and/or death of a third party caused by the operation of the insured vehicle are covered. In cases of death or bodily injury, the benefits for the third party are listed in the policy itself or at the back of the COC.

Note that third-party liability only covers injuries or death of a third party. It does not cover personal injury or death of the insured, or any injuries or death of family and employees. It also does not cover damages to the insured vehicle or property damage to a third party. In case of death, a third party person is entitled to P70,000 death indemnity and P30,000 burial and funeral expense.

Under the CTPL’s third party can claim, it includes Bodily Injury expenditures like hospital rooms, surgical expenses, anaesthesiologist’s fees, operating room, drugs and medicine and even ambulance fees. Also, in case of death or bodily injury, a third party is not required to prove “fault” in order to claim against the CTPL. The third party simply needs to substantiate the claim by submitting under oath a police report of the accident. In case of death, they must present a death certificate. In case of injury, they must present a medical report or hospital disbursement regarding the reimbursement claim.

On the other hand, the Comprehensive Car Insurance in the Philippines according to one insurance company offer greater protection than CTPL insurance. It provides car insurance coverage for accidents that are not the result of a collision, such as flooding, theft, or fire.

With Comprehensive Car Insurance, we normally expect the package to be complete however in reality, it tends to vary across different companies. Accordingly, insurance companies can offer additional benefits and coverage depending on the coverage limit and amount.

At first I really thought that when we say comprehensive, it must be complete and we normally assume that it covers all possible damages including what is now accepted term as “Acts of God” referring to natural hazards.

As for me, the best, rule of thumb is to drive only when you are physically sound and free from mental baggage. Driving requires all your senses to guide you while steering the car’s wheel to your destination. Even your sense of smell is as important as the rest. The beeping and ringing of mobile phones often distracts and driving is a good excuse from not answering a call. Also, learn to use seat belts especially if you are speeding along highways. Stay safe.

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