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Securing the way to safety

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Car is an important investment, thus, owners do all the possible means to protect it. And with the increasing number of road accidents today, car insurance is essential to protect the property as well as themselves and other persons in the event of vehicle damage and injuries. Car insurance wouldn’t prevent accidents from happening, but it helps the car owners lessen their financial burden when these unfortunate incidents occur.

According to the World Health Organization (WHO), more than 1.25 million people die each year while between 20 and 50 million more people suffer non-fatal injuries as a result of road traffic crashes. And without sustained action, road crashes are predicted to become the seventh leading cause of death by 2030, the agency said.

“Road traffic injuries cause considerable economic losses to individuals, their families, and to nations as a whole. These losses arise from the cost of treatment as well as lost productivity for those killed or disabled by their injuries, and for family members who need to take time off work or school to care for the injured. Road traffic crashes cost most countries 3% of their gross domestic product,” the WHO said in its Web site.

In the Philippines, the figure is also alarming. In Metro Manila alone, a total of 110,025 road crash incidents were recorded in 2017, according to the Metropolitan Manila Development Authority (MMDA). This figure translates roughly to 300 cases of road crashes per day.

Vehicle owners in the country are actually required to get a compulsory motor vehicle liability insurance upon the registration of the vehicle to the Land Transportation Office (LTO).

An excerpt from Section 389, Chapter VI of the Insurance Code of the Philippines says that: “The Land Transportation Office 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 Commissioner evidencing that the policy of insurance or guaranty in cash or surety bond required by this chapter is in effect.”

The most basic type of car insurance a vehicle owner can get is Compulsory Third Party Liability (CTPL) insurance, which only covers third-party persons involved in the accident.

The Paragraph (c) of Section 386, Chapter VI of the Insurance Code reads that: “A third party is any person other than a passenger as defined in this section and shall also exclude a member of the household, or a member of the family within the second degree of consanguinity or affinity, of a motor vehicle owner or land transportation operator, as likewise defined herein, or his employee in respect of death, bodily injury, or damage to property arising out of and in the course of employment.”

As explained by online vehicle marketplace Carmudi Philippines in its Web site, anyone outside the car, for example, any unsuspecting pedestrians who are caught in the accident, are covered by the CTPL. Also, those who are riding with the driver who aren’t their employees or a family member within the second-degree consanguinity or affinity are considered third-party persons.

“As the name suggests, only the expenses of the third-party victims are covered by the Compulsory Third Party Liability car insurance. This does not include expenses for personal injuries, damage to the insured car, or damages to the property of any third party. For instance, if you, or any of your relatives or employees get injured during an accident, you will not be covered. If your vehicle sustains damages, or if there is any property damage from the third party, the repair expenses will be coming straight out of your own pocket,” Carmudi Philippines said.

Generally, the third-party car insurance does have a lot of limits. Therefore, vehicle owners who want to ensure more protection can consider comprehensive car insurance that comes with wider coverage and greater benefits. And for further peace of mind, it can be customized to the extent that everything in and around the vehicle is covered.

“Comprehensive car insurance coverage depends on individual car insurance providers. Specifically, these may include loss, damages, and liabilities due to third party deaths or bodily injury, personal accidents, property damage, accidental collisions, theft, malicious acts by third parties, fire and explosions, and Acts of God,” Carmudi Philippines said.

For example, if the insured car has been stolen, the owner can claim an amount based on the market value and depreciation of the lost vehicle as calculated by the insurance company. When some parts of the car have been stolen, the insurance may cover them as well. However, damaged or stolen items inside the car are not covered.

A comprehensive car insurance coverage also allows the insured vehicle owner to file a claim when the car has been damaged due to fire and explosions, and collision to another vehicle, where the damages including the others’ vehicles may be also covered.

In cases when the car has been vandalized by the other people, Carmudi Philippines said that it may be covered by the insurance since it may fall under malicious acts of third party.

For damages caused by natural disasters which fall under the “Acts of God” such as floods, typhoons, hurricanes, tornadoes, hail, wildfires, tsunamis, or earthquakes, it may be covered as long as it is included in the policy.

“For more protection from legal and financial liabilities, the comprehensive car insurance is your best bet. If car thefts often happen in your area, you’re better off with it. Also, considering how flood and natural disaster-prone the Philippines is, the Acts of God comprehensive car insurance policy inclusion is useful,” Carmudi Philippines said. “It may be expensive to buy car insurance, but when you think about the increasing risk factors that you normally encounter on the road, you’ll realize that it’s truly worth every peso you spend. Because in the world of driving, it’s always better to be safe than sorry.” — Mark Louis F. Ferrolino