Car Insurance Shopping Guide: How To Get The Best Deal7 min read
No matter how careful you are on the road, accidents can happen when you least expect it. It may result in injuries and property damages that cause a considerable economic loss for you, your family, and your country, which is why itâ€™s crucial for car owners to purchase car insurance.
According to the World Health Organization (WHO), between 20 to 50 million people suffer from non-fatal injuries from car crashes, and many of them result in disability or dismemberment. Furthermore, the WHO reported that road traffic accidents cost most countries approximately 3% of their Gross Domestic Product (GDP).
In 2016, an average of 299 road accidents occurred each day, and approximately 22,840 Filipinos suffered non-fatal injuries from these traffic accidents, according to the Traffic Accident Report of the Metro Manila Accident Recording and Analysis System (MMARAS). Cars make up the majority of these reported road crashes (108,307), while motorcycles (23,105), trucks (19,614), and vans (18,772) contribute a significant amount.
As a responsible car owner, you need to protect yourself and your family from socio-economic losses that a car accident may cause. Whether you own a car, an SUV, or a motorcycle, you need car insurance. However, insurance providers donâ€™t offer the same packages, and choosing car insurance is like shopping for a car.
Shopping around will help you learn more about how car insurance works and help you offset rising insurance costs. Some insurance providers, for instance, offer freebies, perks, and add-ons bundled with their policy.
Itâ€™s not rocket science, but you need to understand the various factors to consider to ensure that youâ€™re getting the perfect car insurance at the best rates.
Factors that affect the cost of Car Insurance
- Age of Car
A vehicleâ€™s age contributes to the likelihood of its engine and parts to break down, which is why car insurance companies highly consider the age of your car in estimating the car insurance premium or rates.
- Fair Market Value
The Fair Market Value (FMV) of your car is computed according to its model type, make, and series. Your car insurance cost is directly proportional to the FMV of your vehicle because itâ€™s the estimated amount that the insurance provider will pay for in case you total your car.
Where do you park your car? What roads do you usually traverse? Is your location secure or prone to crime?Generally, if a road is more congested, then thereâ€™s a higher likelihood of a driver getting into an accident. Safety and security is also a factor, as some areas are prone to crimes such as theft and property destruction, which is why your address or location can contribute to a lower or higher car insurance premium.
- Accessories and Body Modifications
Auto accessories and body modifications add value to your vehicle and can also be insured for an additional premium. Make sure to declare all additional accessories installed on your car to ensure a seamless process. This will also help car insurance providers assess your premium accurately.
- Additional Coverage
Other types of car insurance will provide you additional coverage. Liability insurance will cover the other driverâ€™s medical costs and the other carâ€™s damage expenses in the event of a collision thatâ€™s your fault, while a collision coverage will cover damages to your vehicle regardless of who was at fault. On the other hand, an uninsured/underinsured motorist insurance protects you from injury and property damage caused by a driver who is not insured.
Your car, its driver, and its passengers are not insured under any situations, but you can purchase additional coverage such as auto passenger personal accidents and acts of nature. Other add-ons include legal assistance, loss of use, roadside and towing assistance, and transportation assistance while your car is undergoing repair.
How to get the best Car Insurance deal
- Shop and Compare
There are probably over 60 car insurance providers in the Philippines and going through each and every one of them can be an impossible task. But, itâ€™s important for you to shop and compare. Thankfully, there are comparison platforms that have already done the job for you.Make sure to go through the shortlist of the top and best car insurance providers in the country. Get personalized quotations from at least 12 companies so you can compare their inclusions, freebies, add-ons, and rates.
- Review the Coverage You Need
Ask yourself much coverage do you really need. Make sure not to sell yourself short by reducing your coverage to what the law requires. The Compulsory Third Party Liability (CTPL) mandated by the Land Transportation Office (LTO) upon vehicle registration is never enough insurance! Auto insurance coverage varies from each personâ€™s situation. For instance, if you live in a flood-prone area, you may need an Act of Nature coverage. Purchasing more coverage may seem like a costly decision, but when an unlikely accident happens, it may cost you your lifeâ€™s savings.There are two main types of auto insurance in the Philippines:
a. Compulsory Third-Party Liability (CTPL)
When you register your car at the LTO, a CTPL insurance is required. You can either purchase this at the LTO or a non-life insurance provider. CTPL insurance protects the policyholder from financial liability if an injury or death results from a car accident. It covers expenses associated with road accidents such as injury, disability and dismemberment, property damage, and death.
b. Comprehensive Car Insurance
Comprehensive auto insurance is not required by law but covers more than just road accidents and collisions. It also covers theft and malicious acts from a third party. If you hold your car near and dear to your heart, then make sure to get comprehensive car insurance with acts of nature that will cover damages to and destruction of your vehicle in the event of flooding, earthquake, typhoons, and other natural disasters.
- Decide on Your Deductible
A deductible is an amount you need to pay when youâ€™re using your car insurance to cover auto repairs. The general rule is that the higher the deductible, the lower your insurance premium and vice versa. When your deductible is higher, you get to save on monthly car insurance expenses. Just make sure that in the event of an accident, you can pay for the deductible (or participation fee).
- Negotiate to Lower Your Premium
There are different ways an insurance provider can lower your premium. As mentioned above, you can opt for a higher deductible to get a lower premium. Double-check your health and life insurance coverage as well.If you already have a good accident insurance policy, you can remove the auto personal accident coverage to lower your premium. Make sure to haggle to get the best deal!
- Pay Attention to Discounts
Because there are a lot of car insurance providers in the Philippines, the market is becoming tighter and more competitive. As such, insurance companies offer various discounts and freebies that will let you shave off a significant amount of your premium, especially when bundled up with other insurance or financial products.However, donâ€™t get too excited when a discount is thrown your way. Some companies create seemingly attractive discounts or promos to lure buyers, but when you review the package, it turns out to be more expensive.
- Choose a Provider You Can Trust
When it comes to car insurance, you shouldnâ€™t just choose the insurance company that offers the lowest rates. Consider their reliability and reputation as well.Itâ€™s important to choose a car insurance provider that can easily be contacted in the event of an accident and will provide assistance when these unfortunate events occur. Imagine that you just experienced an awful traffic accident, and your car insurance provider makes it difficult for you to get some help.
While some insurance providers make it easy for car owners to purchase auto insurance through low premiums and rates, they lowball you into additional hidden charges when itâ€™s time to file a claim.
Some car insurance companies can also use unreliable repair shops that use cheap replacement parts instead of original parts. Others may even unfairly increase your deductible or participation fee after an accident.
- Review Before You Sign
Donâ€™t sign any contract without reading the fine print. Yes, itâ€™s not easy to read, and you might encounter legal jargon you donâ€™t understand, but take the time to read and review it before you sign.If thereâ€™s something you donâ€™t understand or was not in what you discussed during negotiation, donâ€™t hesitate to ask. Itâ€™s crucial for you to know all the inclusions and exclusions, as well as the clauses and terms before signing that dotted line.
Each insurance provider offers various coverage options with unique rates, so make sure to shop around to know all the options available for you. Consult reliable comparison platforms such as eCompareMo to make it easy for you to decide.