Why Do You Need Car Insurance In The Philippines?

Driving can cause many other related problems such as breakdown, accident, or loss even if you are a careful driver. Therefore, to limit bad situations from happening to you, you should have auto insurance ready.

What would happen if you didn’t have car insurance in the Philippines? Why is it so essential? The answers will be explained in the following article. Let’s scroll down to dig into it!

What Is Car Insurance Philippines?

Before looking over reasons for the importance of car insurance in the Philippines, you should understand its conception and common features.


Car insurance, also known as auto insurance, is a financial contract you sign with an insurance firm. To maintain coverage, you need to pay a certain amount each year, depending on the insurance plan you choose from that insurance provider. In return, you will receive financial compensation when you are involved in some problems such as damage, loss, or a car accident.

Common Characteristics Of The Car Insurance Policy

No matter which company you buy auto protection from, they always have the following common features in the car insurance policy.

Personal injury insurance

This policy is to protect the finances of your passengers and yourself. It will provide financial assistance with medical expenses and hospitalization for treatment, if any.

Property damage protection

If you accidentally cause an accident and have to take responsibility for repairing other people’s cars or paying for property costs, the insurance organization will protect you financially. In the case of an accident victim files a claim against you, the insurance company will be responsible for your legal expenses. 

Compulsory third party liability

According to Land Transportation Office rules, whenever you purchase a new car or make a vehicle registration renewal, third-party liability insurance is mandatory. 

Auto Insurance in the Philippines

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What Are The Types Of Compulsory Car Insurance In The Philippines? 

When it comes to standard car insurance Philippines, there are mainly two types, including comprehensive insurance Philippines and compulsory third-party liability insurance.

Comprehensive insurance Philippines

  • This kind of insurance takes responsibility for expenses involved in damage, insured cars loss, or theft apart from your personal belongings.
  • Even if your car isn’t being used, comprehensive insurance provides protection for it. For example, you park your vehicle at the garage and it is vandalized by someone else, the insurance service will cover the repair costs or other payments incurred.
  • The annual premium is much higher than the other type because it provides customers with broader coverage, as the name suggests.
  • Auto Personal Accident policy in this insurance will support you and your passengers in terms of financial expenses for disability, injury, or even death from the accident.
  • Your vehicle is also financially protected from damage caused by explosions or fire.

Comprehensive insurance in the Philippines

Compulsory Third Party Liability insurance 

  • This is the basic but mandatory coverage in the Philippines when you buy a new car or renew your vehicle registration with the Land Transportation Office as mentioned above.
  • This kind of coverage includes your potential responsibilities to third parties in an accident in terms of bodily injury and property damage, excluding the repairing damage costs to the warranted vehicle. 
  • The participation payment for this auto insurance differs based on the purpose and dimension of the specific car to be protected.
  • It includes a Confirmation of Cover add-on which is considered the affidavit for car insurance claim. This means you need to declare the information about you and your vehicle honestly. Here is a sample affidavit for a car insurance claim you should be prepared for when being asked. 

Affidavit of vehicle accident insurance claim

What Would Happen If You Didn’t Have Car Insurance In The Philippines? 

Car insurance is essential and compulsory in the Philippines. What would happen if you didn’t own it? Here are the worst matters you could face if you don’t have auto coverage

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1. You Could Face With Law Issues

You Could Face With Law Issues

As mentioned earlier, the Land Transportation Office requires owners of both new and old cars in the Philippines to have compulsory third-party liability insurance. Therefore, it is against the rules to drive without auto insurance in the Philippines and other countries. 

Most states will fine you hundreds or thousands of dollars. Besides, the Department of Motor Vehicles will take some punishments such as suspension or revoking your driving license. 

If you are unable to pay for the costs of repairing vehicles, personal injury, or property damage to the victims of the accident, you may also face legal action financially.

Driving without car insurance

2. You Might Face Financial Problems

Imagine you are in an accident. You are the driver at fault; you will face punishments for driving without auto insurance and be financially responsible for any property damage or injury you cause. The victim can sue you, and you must also pay all of your legal expenses yourself. 

The total cost of an accident can run into the thousands or even tens of thousands of dollars, which means it’s more than your savings to pay for car insurance.

Financial problems

3. You Had Trouble With The Cost Of Vehicle Repairs

In case you don’t have vehicle insurance, you have to pay all expenses on your own, including car repairs, medical bills, or property loss. If you are wealthy, you can pay for all of these expenses. However, this will be a big problem if the payments count to hundreds of dollars while your budgets are tight to manage.

Repairing costs

In A Nutshell  

We have explained questions related to car insurance, including its conception, features, types, and importance. To sum up, it’s compulsory and essential to have auto insurance in the Philippines. If you don’t have it, you may run into some unwanted trouble listed above. The advice here is when driving any vehicle in the Philippines, you should pay for auto insurance to protect you and your passengers in your cars.

Thanks for reading this article at our category Tips and Advice. If you have any question, feel free to comment below or contact with us at Philmotorlaw.com

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