5 Car Insurance Mistakes Pinoys Make

By Randell Tiongson on November 20th, 2015


The Philippines ranks in the top 10 globally of consumers intent on purchasing a car in the next two years according to the Nielsen Global Survey of Automotive Demand. Another interesting fact is that the Philippines ranks highest globally among current car owners intending to upgrade their cars. With the automotive industry in the country booming – the year-on-year car sales for the month of January 2015 increased by 19.3% according to CAMPI* –this means that more cars on the roads equals higher chances for accidents. Unfortunately, there’s no way to tell when an accident will strike, no matter how prepared we are. Aside from driving defensively, the best way to protect ourselves on the road is to have car insurance.

I talked to a MoneyMax.ph representative, the Philippines’ leading comparison platform for car insurance, on the need-to-know when buying one. A common fact I received is that many prefer to get the lowest premium even if this is not always the best choice. Read on to find out common car insurance mistakes Pinoys make when shopping for such:

  1. Using price as the determining factor

Monthly premium payments for car insurance can take up a portion of our monthly budget. We know the importance of insurance, so people apply for insurance just for the sake of having insurance and thus settle for the most affordable price. Settling for the cheapest option can be a mistake when you’re not getting the coverage you need. Make sure that before you agree to an insurance policy and its pricing, read the entire policy from front to back. Ensure that everything you agreed on with the adviser is stated in the policy. Coverage you may look for includes the following: road assistance, legal assistance, and acts of nature coverage.

  1. Undervaluing your car to get a smaller premium

Say your car has a fair market value (FMV) of Php 1 million, but you prefer to value it at Php 800,000 to get a lower insurance premium. You may save on your monthly insurance payment, but in the unfortunate event that you get into an accident and your car is totaled, you may not be able to get the total coverage fit for your million-peso car. This is because a lower premium payment will you give you insurance coverage for a vehicle of lower FMV. When buying car insurance, it’s best to state the full FMV of your vehicle to get complete insurance coverage.

  1. Failing to research and shop around

Shopping for car insurance, be it online or hopping from one broker to another, may be tiresome. Visiting one webpage to the next can take up a chunk for your time, and you may find yourself experiencing analysis paralysis with all the information you’ve found. Now, you need to find the best deal for you. This may be tiring, but it’s best to research and shop around if you want to get the best deal. This is the beauty of financial comparison websites, such as MoneyMax.ph. You have everything you need in one place, just like a department store. Using comparison platforms will give you the information you need – in this case, car insurance coverage from the country’s leading providers – all in one page. It definitely pays to do your research.

  1. Not considering additional coverage

Additional coverage may include roadside assistance, fire and external explosion protection, and an Acts of Nature coverage which protects your car against natural disasters. It’s best to discuss your insurance application in full detail with your agent. This way you can ensure that you’re getting complete coverage for an affordable price. With the Philippines experiencing an average of 20 typhoons a year, you may consider an Acts of Nature coverage which covers you from natural disasters, such as typhoons, floods, and earthquakes among others.

  1. Forgetting to ask for a discount

Car insurance rates vary depending on the type of driver you are. If you have a squeaky clean driving record, don’t hesitate to ask your agent for a discount on your insurance. You might just be able to shave a few pesos off your monthly payments. This is because having a good driving record and having safe driving habits make you less likely to get into an accident and make an insurance claim. If you believe that you won’t be claiming your car insurance on a regular basis, don’t hesitate to ask for a discount.

Need for speed

Driving a car gets us from points A to B in the fastest and most convenient way possible; however, it’s best to be safe. This means driving safely and having the peace of mind that you’re protected with car insurance. I hope that my chat with MoneyMax.ph was able to help you.


*Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI)



2 thoughts on “5 Car Insurance Mistakes Pinoys Make”

  • Hi Sir Randell,

    What does Fair Market Value mean?
    Our car was declared total wreck /loss 1 day before our insurance expires. The estimated value declared in our policy is 693k. As told by our insurance, they will base it on the market value which is 400k. How come it decreased like that when the value we are paying is for 693k?
    We are still paying the bank since it’s still on process and we have paid 3 monthly amortization after the accident.
    If the insurance pays the bank 400k, how about the remaining amount we’ve paid?

    Thank you.

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5 Car Insurance Mistakes Pinoys Make