While windshields and airbags protect you from a collision, it is the Compulsory Third Party Liability (CTPL) that protects you from the financial losses that accidents bring about. However, its coverage may be limited to your profile as a driver.
Have you thought of expanding your policy to make yourself secure and confident while driving? If yes, then let’s help you decide by discussing the pros and cons of getting additional car insurance coverage. You may read them below.
Advantages of getting extra car insurance coverage
Here are the benefits of having increased car insurance coverage in the Philippines:
1. Have more than the required collision coverage for a third-party.
CTPL is one of the requirements set by the Land Transportation Office in the registration and renewal of a car. This form of insurance policy gives protection from liabilities that are brought by an accident caused by the insured individual. These liabilities may arise from the physical injuries, or worse, death of a third-party involved in the accident.
In other words, the policy will shoulder the medical and/or funeral expenses of the victims so you don’t have to shell out your personal fund. However, CPTL usually has a limited budget of ₱100,000. Increasing your policy benefit will cover the excess incurred.
2. Expand the coverage to more types of damages.
Although CPTL covers third-party victims or passengers, it does not include the damages caused by your car to the properties of those third parties.
By getting extra auto insurance coverage, you can file claims to more types of car mishaps such as the third-party property damage, theft, loss of car parts due to robbery, accidental collision, fire or explosion, vandalism, and other forms of hostile acts performed by other people to your vehicle. It depends on what liabilities you want your car insurance to cover.
You also opt to get a Comprehensive Car Insurance which protects you from all types of risks. Some providers let you choose packages that can be customized according to your needs.
3. Extend the car protection to yourself.
From its name, CPTL coverage only protects third-party victims or passengers. It means that you, the insured driver or car-owner, are excluded from any accidental benefit of your insurance.
Regardless if you have an accidental benefit on your life insurance or not, you can also add coverage for personal accidents on your car insurance policy. As a driver, it will cover the expenses to your physical injuries, disability, or death resulting from any vehicular mishaps on your car.
4. Be more prepared for vehicle damages caused by natural calamities.
There are happenings beyond our control and these are calamities caused by Nature. These can inflict damages to your properties, including your vehicles. And the Philippines is among the countries most prone to natural disasters because of its location.
First, the country is part of the Pacific Ring of Fire, where active volcanoes are, and it explains the frequent occurrence of earthquakes. Next, it is surrounded by seas and an archipelago with many waterways that can cause flash floods or even tsunamis. Then, since the country is in the tropics the heat is extreme to cause drought. Finally, the Philippine Area of Responsibility experiences more or less 20 typhoons every year.
5. Save you from the unexpected financial burden
The concept of insurance is to prepare yourself financially for the inevitable loss. It helps you create a latent fund for emergencies, and car insurance targets the expenses for the maintenance and repairs of your vehicles, which can be very expensive. As mentioned above, it also gives you assistance to cover your liabilities and control your cash flow.
Disadvantages of increasing car insurance coverage
Here are the drawbacks of having higher insurance coverage:
1. Your premium costs are higher.
In products and services, additional features are available by paying more. So, a more comprehensive policy entails higher premiums. Whether the insurance provider allows the customization of packages or not, you must have tailored your needs and know what add-ons essential for you to get. This will prevent you from paying something you won’t actually use.
2. There are participation fees to get your claims.
Filing claims is not just about accomplishing forms and submitting these documents. Policies include participation, which is the amount you need to pay the insurance provider to get your claims as you have agreed to be liable with the cost of the damages or losses.
This includes deductibles and depreciation costs, which will be subtracted from your total claims. A deductible is a fee for every filed loss or damage while the depreciation costs refer to the charges in replacing parts depending on the age of the car.
Tips on getting higher car insurance coverage
Here are the factors to consider if you plan to add coverage on your auto insurance policy:
1. Emergency fund
Wider coverage can pay your accident liabilities, but don’t forget that it is attached to participation fees which you also need to pay. Consider how much fund you need to afford a vehicle-related emergency.
2. Car value
The value of your vehicle is a factor to consider. If your vehicle is more expensive, the insurance premium needs to be higher.
3. Frequency of driving
The more time you spend on driving, the nearer the accident is, regardless if you strictly follow road etiquettes.
4. Financing or leasing
If you are financing or leasing the car, better think if you can afford to pay the full cost if the vehicle become irreparable.
5. Car insurance discounts
Look into possible factors that will affect your premium rates. Is there a useless add-on you can remove? Are there discounts you can apply to your coverage?
6. Comparison of quotes
Every insurance provider will tell you they have the best packages, but you can determine that by comparing the quotations of the policy each provides. There are online comparison platforms like eCompareMo now that do the tasks hassle-free and in a short time.