Is it worth buying Compulsory Third Party Liability insurance?

A car is an investment. Which is why they have it ensured and protected by an insurance policy. There are lots of types of insurance policy that a car owner can avail. However, for the motorists in the Philippines, third-party insurance is required or else, you will not be able to register your car. 

But what is a third-party insurance policy? Is it worth it? Read on this article from Philkotse.com to better understand what third-party insurance is and its benefits.

1. What is third-party insurance?

Third-party insurance if a form of liability insurance. The first party is the policyholder. Second-party insurance is the insurer or insurance provider.

Third-party insurance is coverage for all third-party persons affected by the accident caused by the policyholder. Third-party individuals are those affected people outside the vehicle when an accident happened.

It also refers to anyone riding the vehicle who is not a family member but are also messed up in the accident. This insurance policy often confused as the compulsory third-party liability insurance or (CTPL) which is mandated by the law. However, third-party insurance is actually a coverage benefit that falls under the comprehensive insurance plan.

The compulsory third-party liability insurance is a requirement for the yearly registration process of your car. Usually, you can get the CTPL in an accredited insurance provider are stationed near LTO centers.

Third-party insurance is coverage for all third-party persons affected by the accident caused by the policyholder

However, CTPL only offers a small coverage which means you still have to pay for the excess balance or expenses not included in your compulsory third-party liability insurance. You will have to pay it from your own pocket. Which is why third-party insurance will be of great help.

There are two types of third-party liability coverage. The first one is the bodily injury liability which covers the resulting costs from a person’s injuries. The injury cost refers to the expenses such as lost wages, hospital bills, as well as the pain and suffering of the injured because of the accident.

The second type is the property damage liability that covers the costs of loss or damage to the third person’s property. Examples are payment for the replacement of damaged car, mailboxes or landscaping. The compensation for any loss of structure is also included in the property damage liability.

>>> Read more: How to fill a Compulsory Third Party Liability (CTPL) insurance claim.

2. Why is the importance of third-party insurance?

Required by the law

Having a third-party liability is a requirement before you can have your vehicle registered in the Philippines. A driver or car owner must have at least a minimal amount or standard property damage liability and bodily liability coverage. So, when you buy a car, in order to go through the process of registration, you must first acquire third-party liability insurance.

Protection against liability

The insured or the insurance provider will be discharged against any liability for the third party in the occurrence of accidents. The car owner or user is free and insured from financial obligation or indemnity

The third-party liability insurance will cover the medical expenses and damages done by the insured.

It will spare the drivers and motorist from spending an awful lot of cash for paying the damages done to the property of the affected party (not related to the insured) or hospital bills in cases of injuries and even death. It gives motorist peace of mind whenever they hit the road.

The insured or the insurance provider will be discharged against any liability for the third party in the occurrence of accidents

Compensation for the affected person/s

The third-party insurance policy will not only save the insured form any liability. It will also ensure the welfare of the person/s involved in an accident caused by the insured or the policyholder.

The third-party insurance is essential for the third-parties involved because it guarantees them that they will be well assisted and taken care of.

They wouldn’t have to worry about the medical expenses and all the damaged caused to their property will be compensated. Hence, the third-party insurance policy does not only help the insured, but it is also a protection to the victims of the accident.

The third-party insurance policy will not only save the insured form any liability. It will also ensure the welfare of the person/s involved in an accident caused by the insured or the policyholder.

2. Why the LTO requires third-party liability insurance better than comprehensive car insurance?

When you purchased a car, the dealers will offer or recommend that you purchase car insurance. The car insurance policy offers protection to you, your family and your car. It will protect your car from theft, collision, accidents, explosion, fire and malicious acts caused by third parties or acts of Gods.

It will also cover you from medical expenses resulting from bodily injuries and liabilities, loss and damages to third-party death.

The LTO requires third-party insurance or the Compulsory Third Party Liability because it provides protection for the general public and not just for the car owner. The main purpose of the CTPL is to protect the public from negligence if ever a car accident happened.

Because most car owners already purchase insurance that secures their life and their vehicle, the LTO also wants to ensure that the car owners will be responsible in providing assistance in case they caused damage, injury, and death to the third-party.

Compulsory Third Party Liability provides protection for the general public and not just for the car owner

However, the standard CTPL usually is not enough to cover all the expenses that’s why you might still have to avail a third-party insurance policy to provide a wider coverage that will save you from a much bigger liability and expenses.

It is very important to car owners or drivers who are responsible for the accident because if the damaged or injury is severe, the standard CTPL will not be enough to cover it all. You will still have to spend thousands of pesos to pay for all the liability.

You will still have to spend thousands of pesos to pay for all the liability

The standard CTPL usually is not enough to cover all the expenses that’s why you might still have to avail a third-party insurance policy to provide a wider coverage that will save you from a much bigger liability and expenses.

3. Is it worth buying third party insurance?

If you ever wonder if the third-party insurance policy you purchased is worth every penny; yes, it is. Mainly because third-party insurance provides a wider coverage than that of a standard CTPL.

It will be beneficial especially if ever the accident caused by the policyholder resulted in severe damage, injury, and death to the third party. It ensures that the insured will be free from any liability to the third party and he or she does not have to pay for the excess expenses left by the basic CTPL.