All car owners are required by the Land Transportation Office (LTO) to secure a Compulsory Third Party Liability (CTPL) insurance upon registering their car.
Some questions that most first-time vehicle owners ask about CTPL are:
- Why do I need a CTPL?
- Who are covered by the CTPL? Who is the ‘third party’?
- Is the basic CTPL from the LTO enough to cover our car insurance needs?
- How is the CTPL different from a comprehensive car insurance?
To help us appreciate the value of maintaining a CTPL insurance for our vehicles, below are the details of its benefits and why the government mandates that all vehicles be covered with one.
- A CTPL protects ‘third parties’ from the possible damages that may arise from an accident involving the insured vehicle. A car cannot be without this type of insurance coverage as it is required by law.
- ‘Third parties’, as defined under Section 373, Chapter VI of the Insurance Code of the Philippines, are the following:
- Any person other than a passenger;
- Not a member of the household, or a member of the family within the second degree of consanguinity or affinity of the vehicle owner;
- Not his employee in respect to death, bodily injury, or damage to property arising out of and in the course of employment.
- The vehicle owner’s friends and other persons who are not his relatives but are riding in his car are considered third parties, not passengers.
- A ‘third party’ may either be inside or outside your car.
- A passenger of a public utility vehicle becomes a ‘third party’ the moment he alights from the vehicle.
- ‘Passengers’ are defined the Insurance Code of the Philippines as:
- Any fare paying person being transported and conveyed in and by a motor vehicle for transportation of passengers for compensation;
- Persons expressly authorized by law or by the vehicle’s operator or his agent to ride without fare;
- The CTPL covers the car owner’s legal responsibility over the third party’s injury or death resulting from an accident involving the insured vehicle. This means that the insurance will provide immediate financial assistance to the victim and his dependents while discharging the vehicle owner from liabilities. All these shall be provided for regardless of the car owner’s financial capacity. The current CTPL coverage is Php 100,000.00.
- Comprehensive car insurances have wider coverage than CTPL. It includes insurance against damages and liabilities caused by collisions, fire, acts of God or nature, personal accident insurance of the passenger, and car theft. Some insurances provide financial assistance for car repairs, regular maintenance check-ups, and roadside assistance. It also costs more to acquire a comprehensive car insurance; it is optional, not mandated by law.
Make sure that your CTPL policy is genuine and updated. Avoid entrusting your car registration documents to fixers and individuals posing as liaison officers for the LTO. This is one important errand you need to get done personally to be sure that your vehicle is properly and legitimately registered and provided with a CTPL insurance.