Does the type of car you drive affect insurance cost? - Let’s find out

Wanna buy a car? In that case, you need to be aware of the ownership costs associated with having a motor vehicle, which include paying for the car, its service & maintenance, fuel, repair work, and insurance. At Zen Insure, we look forward to catering to all your insurance needs to the best of our ability. Here, we unveil another significant aspect of insurance: the relationship between car insurance costs and the type of vehicle.

But before that, you need to understand the basics of car insurance in the Philippines. So let’s get started.

Car insurance in the Philippines

Every car owner in the Philippines needs to obtain basic insurance to drive legally. Furthermore, one significant benefit of having car insurance is the strong financial safety net it provides to the policyholder. However, to enjoy the benefits of insurance, you must understand the different policies at your disposal, the most common being Compulsory Third-Party Liability Insurance (CTPL) and Comprehensive Insurance.

CTPL vs. Comprehensive insurance

CTPL	Comprehensive
It is required by law and is a must for vehicle registration at the LTO. It only covers third-party injury or death.	Not mandatory, but highly recommended. It offers coverage for the vehicle against theft, natural disasters, collision damage, vandalism, and other related risks.

Car insurance regulation in the Philippines

When purchasing car insurance in the Philippines, ensure that the company is certified by the Insurance Commission (IC). Operating under the wings of the Department of Finance, the IC supervises the operations of all insurance companies, including claim processing, protection of consumer rights, and fair pricing. Furthermore, in case of a dispute with the insurer, the matter can be escalated to the IC.

Here are a few certified non-life insurance companies to consider -

Malayan Insurance Co. Inc.
Pioneer Insurance
MAPFRE
Prudential Guarantee
BPI/MS Insurance Corp

Note: This is not an exhaustive list; refer to the IC’s official directory for a dozen additional names.

Also Read: Top 10 Car Insurance Companies in the Philippines

Tips to verify an insurance company

Check the IC’s latest directory.
Conform to their certificate of authority for the relevant category, in this case, non-life.
Avoid dealing with companies not on the list; most probably, they are dealing illegally.

What determines your car insurance cost?

Now that you understand the basics of car insurance in the Philippines, it's time to discuss the factors that influence the determination of premiums. The list includes - driver’s profile, location, and usage pattern. Let us discuss each of these factors in detail -

Driver’s profile	Age - Young drivers are often considered riskier and so pay a higher premium. Driving record - More traffic violations and accidents mean a higher premium. Occupation - Some jobs are considered more stable than others and therefore attract an affordable premium.
Location	City vs Province - Metro Manila drivers may pay a higher premium compared to those living in provinces, due to higher accident and theft rates.
Usage pattern	Mileage - The daily mileage matters; the more you drive, the more you expose your car to risk, which in turn raises the insurance cost.

Type of car & insurance cost

In addition to all the above factors, there is one more factor that affects your car insurance cost: the type of car you drive. Let us discuss it in detail -

Photo from Shutterstock

Car segments & insurance cost

A-segment cars, which include the smallest and most affordable vehicles, such as the Hyundai Eon and the Mitsubishi Mirage, are less expensive and cheaper to repair. They are inexpensive to insure.
B-segment cars are compact, but offer more room and improved comfort and technology compared to A-segment vehicles. A few examples are the Toyota Vios and the Honda Brio. They are among the most commonly insured cars, and due to the easy availability of parts, they are relatively affordable to insure.
C-segment cars are spacious and powerful. Vehicles like the Honda Civic and Mazda 3 are considered suitable for families and long drives. However, when it comes to insurance, the premium is a bit high due to its higher base price and tech features.
D-segment cars encompass executive sedans and large family vehicles, featuring numerous premium features. Some common examples include the Toyota Camry, Mazda 6, and Honda Accord. These vehicles carry high insurance rates, primarily due to their high repair costs and luxurious components.

Vehicle type & insurance cost

Vans, MPVs, & pickup trucks can belong to multiple segments; however, they share a few common traits, including extensive build and versatile use. Another common thing is a higher insurance premium due to their high market price, expensive parts, and off-road usage.
Sedans that are small and cheaper to repair generally have lower insurance costs; it’s the opposite in the case of luxurious sedans.
SUVs are typically more expensive to insure, due to their high market value and size.
Smaller and cheaper hatchbacks have a lower premium compared to pricer and more luxurious units.

Local or imported car & insurance cost

Locally assembled cars benefit from cheap & easy part availability, and are also easily serviceable, resulting in lower insurance costs.
Cars that are imported, primarily from outside ASEAN countries, come with a higher premium due to the use of expensive parts and specialised labour involvement.

Car popularity & insurance cost

Is your car popular among thieves? This is a question that most insurers consider before determining the premium. For example, in the Philippines, thieves often target Toyota and Honda cars; therefore, their insurance costs are slightly higher, despite their economic stature.

Tip: Invest in car safety and security devices, and it will lower your premium.

Safety rating & insurance cost

Cars with good safety & crash ratings, airbags, ABS, dashcams, and an advanced driver-assist system are most likely to receive an insurance discount. Why? These features reduce the insurer’s risk and promote safe driving.

How to lower your car insurance premium

Photo from iStock

Tip 1: Go for a higher deductible

A higher deductible typically results in a lower annual premium. However, make sure that you can comfortably make that payment without affecting your savings or emergency fund.

Tip 2: Compare quotes from different providers

Never settle for the first quote. Ensure that you compare quotations from at least three different providers. This will help you find the best deal around.

Tip 3: Bundle policies

You can receive a discount by bundling all your insurance policies with one provider.

Top cars with affordable premium

If affordability is a concern for you, consider buying a car after factoring in its insurance costs. That’s because a significant difference in the two cars’ prices will result in a premium of around PHP 5,000 to PHP 10,000 per year; however, over a few years, it would add up to PHP 50,000 or more in premium costs. Therefore, it is recommended that you consider your options before choosing a car.

Here are a few affordable cars to insure -

Toyota Vios
Honda City
Mitsubishi Mirage
Toyota Wigo
Suzuki S-Presso

Overall, the aim is to choose a car that is low on maintenance, safe, and has easy & local parts availability.

Also Read: Looking to cut insurance costs in 2025? Consider buying one of these cars

Mistakes to avoid when buying car insurance

Focus only on the premium and not the coverage offered.
Skipping essential add-ons like the Acts of God/Nature.
Not paying attention to the insurance provider’s reputation and claim history.
Not reading the policy fine print before signing the papers.
Ignoring policy exclusions, renewal and rate hike terms.

Bottom line

It is a fact that the type of car to buy impacts your insurance expense, sometimes by quite a substantial margin. Therefore, when purchasing a vehicle, it is advisable to check the segment, the brand, value, safety rating, etc, as all these factors contribute to the premium.

Now that you have bought the car and still wanna lower the premium, there are a few things that can be done, including bundling policies, installing safety devices, and maintaining a clean driving record.

The overall goal should be to achieve good coverage at the lowest possible price, resulting in peace of mind on the road.

FAQs

Q1. Does the insurance cost depend on the car brand?
Ans. Yes, luxurious car brands and the ones popular among thieves are expensive to insure.

Q2. I have a second-hand car. Can I insure it?
Ans. New or used, every motor vehicle in the Philippines is required to be insured. CTPL insurance is mandatory for all vehicles.

Q3. What is the most affordable insurance plan for Filipino car owners?
Ans. CTPL insurance is the most affordable car insurance plan; however, it offers minimal coverage that primarily takes care of third-party injury or death.

Q4. I have an EV, will I have to pay a higher premium?
Ans. Generally, yes, due to the costly parts and limited repair facilities of EVs.

Q5. Can we switch insurance providers mid-term?
Ans. Yes, you can switch car insurance providers at any time.

Q6. How much does comprehensive insurance cost?
Ans. Depending on the car’s model, the driver’s age, location, driving history, and provider, comprehensive insurance could range between PHP 10,000 and PHP 70,000.

Q7. What are some of the popular add-ons to consider?
Ans. Add-ons like roadside assistance, Act of God, and personal accidents are known to enhance coverage.

Q8. How can I file an insurance claim?
Ans. It’s simple: contact your insurer as soon as possible, submit the required documents, including photos and the police report, and any other relevant documents.

Q9. What are some of the affordable cars to insure?
Ans. Toyota Vios, Honda City, and Mitsubishi Mirage.

Q10. Are imported cars expensive to insure?
Ans. Yes, especially those imported from Europe and the U.S., due to the expensive parts and specialised labour requirements.

Also Read: How to save money on your car insurance premium