Common Car Insurance Mistakes That You Usually Make

Written by imoney

If you’re navigating the streets of Manila in the car that you bought with your hard earned money, one of the most important things that you should have is car insurance. You can get a compulsory motor vehicle liability insurance (also called Comprehensive Third-Party Liability or CTPL) when you register your vehicle with the Land Transportation Authority. It’s a basic and affordable car insurance plan which costs approximately ₱2,000 for a three-year coverage. But just like its name suggests, CTPL only covers third parties. Which means if you figure in an accident, you don’t get anything. Only third party persons involved in the accident will be able to claim from the insurance company.  

Unlike the CTPL, you can protect yourself from bodily injury, own damage or theft, property damage, acts of nature, or personal accidents with a comprehensive car insurance. It can cover many things that a basic insurance such as the CTPL can’t. This is why it’s very important to put a great deal of thought in buying car insurance. Here are some of the things that you should avoid when shopping for one.

Settling For The Cheapest Option

Most car owners buy car insurance just for the sake of having car insurance coverage. Most of the time, they go for the most affordable option, thinking that any kind of car insurance is better than having no car insurance at all. Unfortunately, this is one of the biggest mistakes you can make as a car owner.

Remember that cheap is not always a good thing. Even if it’s the lowest priced car insurance in the market, if it doesn’t meet your needs, you will still end up paying more. Especially if your situation calls for a full comprehensive coverage.

If you drive an expensive car and transport people around on a regular basis, it can mean paying a lot of money on vehicle repair and medical bills in the event of an accident. If your insurance coverage is too limited, you can use it all up and even end up paying for the amount that exceeds your limit.

Getting the cheapest car insurance in Philippines equate to subpar protection. When buying car insurance, think about the risk that you and your family go through each day and just how protected you want to be when accidents strike.  

Undervaluing Your Car

Some people undervalue their cars just to pay lower insurance premiums. If your car’s market value is ₱1 million, valuing it at ₱800,000 may sound like a clever idea. You can save thousands of pesos each month on your insurance payment. But if something unfortunate happens and you meet an accident on the road, do not expect to receive insurance proceeds that will cover the total cost of the damages. Declare only the correct information to get the best and the most out of your insurance coverage.

Not Doing Enough Research

It’s rather exhausting and confusing to shop around online or to speak to different car insurance representatives about the best car insurance. There are so many things to check, and every offer pretty much sounds the same. Reading through the fine print takes time, so make sure that you devote some time to read and understand it.

It’s best to know what you’re paying for in a car insurance so you don’t end up double covering yourself. Go over the terms and conditions so you will be properly educated on the exclusions of your coverage. Knowing what’s covered and what’s not will give you the financial security, as well as encourage you to better take care of your vehicle on and off the road.  

Don’t make impulse purchases when it comes to car insurance. Compare a few products and see which ones meet your requirements and work well with your circumstances. Your car insurance should meet both your budget and your needs.

If you’re not sure where to start, you can always get information or request a quotation from your car dealership’s insurance company. They can provide you with information on which insurance companies pay properly and immediately. They can also give you information on which ones are usually delayed when sending in authorization for car repairs.

Go for insurance companies that have a positive relationship with authorized dealers. Five star ratings mean their service is quick and assistance is immediate.

Not Preparing For Additional Coverage

If you don’t do proper research before buying car insurance, you can miss out on things like acts of nature coverage, fire protection, external explosion protection, or roadside assistance.

These are not automatic benefits that come with your auto insurance. Speak with your car insurance representative regarding your insurance coverage and what additional coverage you can get that’s right within your budget.

You may have to pay extra for a comprehensive car insurance, but just think of it as buying the best kind of protection and peace of mind. Knowing that you have good insurance coverage means that you won’t have to break the bank just to pay for costly repairs.

Not Being Truthful

Car insurance is expensive, so some people get creative to cover up embarrassing truths that could jack up the price of their premiums. How much you pay for your car insurance will also rely on the information that you provide about your place of residence, who drives the car, and how well you maintain your car, just to name a few. Being dishonest about it simply just isn’t worth it.

Not Asking For a Discount

If you’re a good driver who drives safely and defensively, you can actually ask for a discount on your car insurance premium. Normally, insurance companies can give you 10% discount, called a ‘no claim bonus’. This means that you have gone for quite some time without making an insurance claim. A good driving record can really help, especially when it’s time to renew your insurance coverage. Don’t hesitate to ask your agent for a discount. Those few hundred pesos that you save each month can go a long way when it comes to other expenses.

If you want to learn more about the ins and outs of car insurance, we have prepared a simple and straightforward infographic on how car insurance works in the Philippines. Hopefully, this could guide you in choosing the right option for your coverage.