Basic Non-Life Course

Motor Car Insurance

Motor Car Insurance

BASIC NON-LIFE COURSE

Participant’s Workbook
Version 2017

Distribution Learning & Development

Project Pride
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or AXA - CPAIC, 2017
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Participant’s Workbook
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Motor Car Insurance

WHAT IS A MOTOR VEHICLE?

• Using public roads and highways •

Registered with Land Transportation
Office with Confirmation of Cover(COC)
• Propelled by its own power

MOTOR CAR INSURANCE

“… a contract whereby one (Insurer) promises for a consideration to indemnify
another (Insured) for direct loss or damage of the insured vehicle and to pay any
claim for death of or bodily injury to and property damage of any Third Party
caused by or arising from the ownership or operation of the vehicle.”

TYPE OF INSURANCE AGAINST

1. Loss or damage to a motor vehicle
2. Liability to passengers and/or Third Parties for:
a. Death
b. Bodily Injury
c. Property Damage

POLICY FORMS
• Private Car Policy (PC)- usually used for domestic and pleasure purposes.
(ex. sedans, wagon-type, vans, etc.)
• Commercial Vehicle Policy (CV) – vehicles used in commerce or business
intended to generate income. (ex. light truck, drop-side, dump truck)
• Motorcycle Policy (MC) – covers standard 2-wheeled automobile.
• Land Transportation Operator’s Policy (LTO)- for vehicles used to
transport passengers for a fee (ex. buses, taxis, jeepneys)
• Motor Trade (MT) - for cars that are up for selling (ex. car dealers)

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CLASSES OF POLICIES (CPAIC - Specific)

1. PC 1 – Sedans (hatchback)
2. PC 2 – Wagon types (SUVs, CUVs, AUVs, Pick-Up)

4 SECTIONS OF THE MOTOR CAR POLICY

SECTION I: COMPULSORY THIRD PARTY LIABILITY (CTPL) - Compulsory Motor Vehicle

Liability Insurance (CMVLI)
• Social Insurance which protects the innocent
public in the event of vehicular accidents.
• Required by Law as a condition precedent to
registration of vehicle.
• Refers to Death / Bodily Injury to Third Parties.

CTPL REQUIREMENTS
• Shall take effect only if the scheduled vehicle is driven by an Authorized
Driver
• Fault must be attributed to the Assured.
• Limit of Liability is industry standard at P100,000.00 per accident
subject to a Schedule of Indemnity.

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AUTHORIZED DRIVER
The assured or anyone driving the vehicle with the assured’s permission
provided that:
1. The driver is duly licensed
2. The driver’s license is in force at the time he is driving the motor vehicle
THIRD PARTY
Section 373 (c), Chapter VI of the ICP, the motor car policy defined third party;
THIRD PARTY shall refer to any person other than a PASSENGER as defined in
the law and shall also exclude a member of the household, or a member of the
family within the second degree of consanguinity or affinity of the vehicle
owner, or his employee in respect of death, bodily injury, or damage to property
arising out of and during employment.

PASSENGER
 Any fare paying person being transported and conveyed in and by a
motor vehicle for transportation of passengers for compensation,

 including persons expressly authorized by law or by the vehicle’s operator

or his agents to ride without fare. (need not necessarily be a fare paying
passenger)

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SCHEDULE OF INDEMNITIES FOR BODILY INJURY AND/OR DEATH

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SECTION II: NO FAULT INDEMNITY

• Pays claim for Bodily Injury / Death to any Third Party without the
necessity of proving that the Assured is at fault
• Amount payable should not exceed P15,000. This 15K is part of the
minimum P100K CTPL cover.
• Helps the victim meet the immediate expenses.

CONDITIONS
• Proof of Loss, under oath
• Police Report or any evidence sufficient to establish the accident
• Medical Report and evidence of medical or hospital expenses
• Death Certificate and evidence sufficient to establish the proper payee

WHO WILL PAY?

• Injured party may only claim against one vehicle owner or Insurer
• If the third party is in the process of riding, mounting or dismounting a
vehicle, the Insurer of that vehicle will be the one to pay “No Fault”
• In any other case, Insurer of the directly offending vehicle will pay “No
Fault”

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SECTION III: OWN DAMAGE & THEFT (OD/THEFT)

A. PHYSICAL DAMAGE – Covers damage to the insured vehicle because

of:
• accidental collision or overturning
• fire, whether external or self-ignited.
• malicious act done by a third party.
• damage while in transit, rail, lift or elevator (including process of
loading and unloading)
• Standard accessories covered:
A. Mags
B. Stereo
C. Aircon
B. THEFT
• Covers loss or damage caused by
burglary, robbery and housebreaking
• Recovery Period is 90 days.

DEPRECIATION FEE
• When and How it should be applied?
• Points to remember:
 parts to be replaced
 Labor charges are not included in the depreciation fee
 Reference: Job Repair Estimate Form

SCHEDULE OF DEPRECIATION

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METHODS OF INDEMNITY
• Cash Payment
• Repair
• Replace

REPLACEMENT OF PARTS
• Cost of brand new parts less the share of the insured on the cost of
replacement parts
• Computation is based on set percentage depending on Age of the
vehicle.

DEPRECIATION (ILLUSTRATION)

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LOSSES NOT COVERED

• Losses within the policy Deductible
• Deductible
 An amount up to which a claim cannot be payable.
 An amount that serves as the participation of the Assured to every
loss.

APPLICATION OF DEDUCTIBLE

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SECTION IV: VOLUNTARY THIRD-PARTY LIABILITY (EXCESS LIABILITY INSURANCE)

Sec. IV A – Excess Bodily Injury Liability (EBI)

a. Applies to liability incurred in excess of the CTPL.
b. Compared to CTPL, it is no longer subject to a Schedule of
Indemnity. It is a Lump Sum Benefit.
c. Limit of Liability
i. Minimum – ₱100,000
ii. Maximum – ₱300,000
iii. Over ₱ 300,000 – case-to-case basis

Sec. IV B – Third Party Property Damage (TPPD)

d. Applies to liability incurred due to damage to TP
e. Limit of Liability
i. Minimum – ₱100,000
ii. Maximum – ₱300,000 iii. Over ₱300,000 – case-to-case basis

SUMMARY OF COVERAGE
Death & Bodily Injury o Section I - Compulsory
Third-Party Liability o Section II - No Fault
Indemnity o Section IV A - Excess Bodily Injury
Loss of/or Damage to the Insured’s car and its
accessories o Section III – Own Damage /
Theft
Damage to Third Party Property o Section IV B -
3rd Party Property Damage

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ADDITIONAL COVERAGE (OPTIONAL)

• ACTS OF NATURE (AON)
 may be availed subject to additional payment of an additional
premium.
• UPPA (Unnamed Passenger Personal Accident)
 coverage intended to protect people riding in, boarding in, or
alighting out of the insured vehicle. Premiums may vary from one
insurance company to another.

GENERAL EXCLUSIONS
1. Place of accident – outside of the Philippines.
2. Any accident or liability caused or incurred outside the Republic of the
Philippines.
3. While the Scheduled vehicle is:
a. Used otherwise than what is provided for in the limitations as to
use
b. Being driven by a person other than an Authorized Driver
4. Act of Gods/Nature
5. Acts of Man or war-like activities.
6. If the vehicle is used for:
a. Handling or carrying of logs, lumber, sand, gravel, bottled
beverages, gasoline products, flammable materials
b. Racing, Pace-making, Speed Testing
7. Consequential Losses, depreciation, wear and tear, mechanical or
electrical breakdown, etc.
8. Damage to the tires unless the vehicle is damaged at the same time
9. Malicious damage caused by the assured, any member of his family, or
a person in the service of the assured
10. Damage caused by overloading or strain
11. Liability by virtue of an agreement but which would not have attached in
the absence of agreement.
If you are not at fault, don’t promise to pay the third party just because you’re insured

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PROHIBITED RISKS
1. Rental Cars, U-drive, tourist cars and buses, and the like
2. All kinds of trucks carrying explosives, chemicals or cargo of flammable
nature, gravel and sand, logs or timber for mining
3. Heavy equipment / machineries used in construction and in the
Insured’s farm or concession such as tractor, dozers, and crane
4. Jeeps – open and stainless steel
5. Vehicles which do not have agencies in the Philippines or which are no
longer manufactured
6. Foreign assembled cars which have agencies in the Philippines but have
no available parts in the local market such as Impala, Monte Carlo,
Charger, etc.
7. Ambulance, police, fire and similar type of emergency vehicles
8. House movers, mobile homes and offices
9. Circuses, carnival and other amusement vehicle
10. Junk dealers
11. Vehicles being used illegally for hire or rent (colorum)
12. Tax exempt vehicles
13. Locally-assembled/reconditioned vehicles
14. Vehicles used in motor trade and auto dealers, repair shops, service
stations, and garages
15. Sports car including those designed or altered to approximate sports car
16. Vehicles being used to give driving lessons for a fee

ACCEPTANCE REQUIREMENTS:
Age must be within ten (10) years old. Over ten (10) years are considered on
a case-to-case basis.
Valuation must be based on the current market value.
Availability of supply of spare parts
Type/ Model/ Use of Vehicle must not be appearing in our PROHIBITED
RISKS List

REQUIRED INFORMATION (for quotation)

1. Insured

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2. Description of the Unit – Year model, make / type

3. Photocopy/scanned copy of OR and CR

4. Period of Insurance (if available)

If, Commercial Vehicle:

• Vehicles usage and its cargo

• Nature of Business
• Area of Operations
• Business collateral
• Picture

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REQUIRED INFORMATION (for quotation)

1. INSURED
a. Complete Name
b. Complete Address and Contact Details
i. Landline
ii. Mobile Number(s)
iii. Email
2. Amount of Coverage – Based on current Fair Market Value (FMV)
a. References
i. Sales Invoice of the Motor Vehicle
ii. Existing Insurance Coverage
iii. Fair Market Value
3. With life cover
a. Date of Birth / Age
b. Civil Status
c. Gender

REQUIRED INFORMATION
Accessories
o If not declared, damaged parts will be replaced by the built in or
original parts.

Mortgagee

o Bank

o Financial Institution

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