Do you have enough insurance coverage?

Do you have enough insurance coverage for your vehicle in case of any eventuality?

This may sound like the opening line of an insurance agent, but try to give the coverage of your motor vehicle insurance a thought, but before you do so, read through this article.

In order to understand motor vehicle insurance better, we talked to somebody from the industry, Antonio ‘Loloy’ Sabuga, senior assistant vice president and sector head for Visayas and Mindanao of Chartis.

Sabuga said that when you register your vehicle, only the Compulsory Third Party Liability (CTPL) is required by the Land Transportation Office (LTO).

He said that this type of insurance covers only a maximum of P100,000 for bodily injury and doesn’t cover the injuries of the person operating the vehicle or the employees or relatives of the vehicle owner up to the 2nd degree.

Voluntary Insurance

In order to make sure you won’t have problems paying bills in case of accidents, Sabuga said that there are voluntary insurance that you can buy.

One is the Third Party Liability-Bodily Injury (TPL-BI) where the owner of the vehicle will be covered for hospital expenses on somebody who gets hit by your vehicles beyond the coverage of the CTPL.

There is also the Property Damage (PD) insurance that covers claims of property damage or fixed objects that are hit by your vehicle.

If you don’t want to worry about repairs for your vehicle when it gets involves in a mishap or in case of theft, you can get the Own Damage (OD) insurance.

Sabuga said that if you want all of these types of voluntary insurance coverage, you can ask your broker or agent for a Comprehensive Insurance. This type of insurance covers the TPL-BI, PD, and OD.

Due to recent calamities, the Acts of Nature (formerly called Acts of God) insurance also came about.

Sabuga said that this is not included in the Comprehensive Insurance and has to be bought in addition to the CI. He said that this is now a requirement of banks or other financial institutions when you mortgage your vehicle.

He explained that this came about after the disaster wrought by Typhoon Ondoy in Luzon that caused severe flooding and damage to several vehicles.

Sabuga recommends that one should get the comprehensive insurance so that you would have fewer things to worry about in case of any eventuality.

The coverage of such, however, differs from one company to another. He said, “In our company, we even have insurance that covers lost keys.”

It is important, Sabuga said, that the one buying insurance should know what are covered and what are not even if you are buying comprehensive insurance. The cost of comprehensive insurance varies.

Sabuga explained that insurers base their rates on loss experience and the value of the vehicle. Simply put, this means that if your vehicle often figures in mishaps, this increases the cost of your premium.

If you have a good loss experience, this can also help lower insurance premiums. Companies call this as No Claim Bonus.

How to Claim

If you need to claim against your insurance, you must report the incident to your insurer.

Minor claims are usually just settled in house while major ones are assigned to private adjusters.

Sabuga said that the adjusters would check what are covered and would determine what would be paid.

It is always best to have a police report, but in minor cases, there are companies that would accept a driver’s notarized affidavit.

Don’t Count the Cost

Sabuga advises owners of vehicles not to count the cost of insurance.

“It is best to be covered because of uncertainties,” he said.

He advises clients to check if the insurance company is a reputable one. To know this, you can always ask your agent for the ranking of their company compared to the others in the country.

“It is best to go for a company that is in the top ten,” he advised.

To understand more about motor vehicle insurance, Sabuga said that buyers should talk to their agents or visit the company offices.

On a final note, he said, “The cost of insurance in minimal compared to the risk involved.”