Why does saving money on car insurance matter? What is the big deal? Is the premium burdensome? After reading the title, such questions might arise, and we are here to justify. You see, car ownership is on the rise in the Philippines. Every day, hundreds of new cars are sold, and along with them come the associated costs of car ownership, including maintenance, service, repair, fuel, and insurance premiums.
While all the other elements can not be controlled entirely by the owner, car insurance premiums can be lowered to some extent through smart financial moves, thus giving some relief to your pocket. And everyone likes it when their money is saved. Right?
The goal of this article is to help you stay protected on the road, but without burning a hole in your pocket. So, here we have some legitimate strategies for Filipino car owners and insurance applicants seeking a budget-friendly solution, along with insider advice.
But before that, let’s brush up on our knowledge of car insurance premiums, because you should know the very element that you are taking all the effort to cut short.
Car insurance premium - Understanding the basics
What is a car insurance premium? It is the amount of money you pay to the insurance company in exchange for the protection/coverage it offers for your vehicle against accident, collision, theft, fire, flood, vandalism, etc.
Usually, paid annually or monthly, depending on the insurer and policy terms, the premium depends on several factors, such as coverage, personal details, and vehicle-related aspects.
Car insurance coverage
Let us now shed some light on the type of insurance coverage, as it too impacts the premium. The coverage is categorised as follows -
Compulsory Third-Party Liability (CTPL) coverage - Required by law and necessary for vehicle registration, CTPL provides coverage against third-party injury or death resulting from the use of the insured vehicle. It does not protect the policyholder or the insured motor vehicle.
Comprehensive coverage - Not mandatory, but highly recommended by the experts. It offers a wide range of coverage against theft, accidents, collisions, natural disasters, vandalism, riots, and other related events.
Add-ons - To further enhance your policy beyond the basics, insurance providers offer add-ons such as Acts of Nature coverage, Roadside Assistance, Personal Accident Insurance, and Loss of Use coverage. Each one provides a specific coverage and adds to the premium.
How is the premium calculated?
The insurance provider considers several factors when determining a client's premium. Some of the most common factors include - car’s brand, model, and price (fair market value), driver’s age, driving record, coverage type, deductible, driving location, and add-ons.
Out of the above list, here are the top few factors that influence the car insurance premium -
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Vehicle type, make, and model |
Luxury & high-performance cars cost more to insure compared to affordable, fuel-efficient, and mass-market cars. |
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Driver’s age, driving history, and experience |
New, young drivers with limited experience are considered high-risk and therefore attract a higher premium compared to drivers with a clean driving record. |
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Location & frequency of vehicle usage |
Car drivers, especially those in heavy-traffic or flood-prone areas, are more expensive to insure compared to those who are less driven or commute in safer areas. |
How to save money on car insurance premiums
Photo from FreepikTip 1: Compare quotes from multiple insurance providers
Never, ever settle for the first offer you get. It is highly recommended to compare quotes from multiple providers. For convenience, use online comparison tools like Zen Insure.
Tip 2: Bundle up your insurance policies
One of the easiest ways to save money on insurance is to bundle all your insurance policies, such as life, home, and vehicle, with the same provider. This will unlock discounts for you.
Tip 3: Go for higher deductibles
Opting for higher deductibles in your insurance policy will lower your premium; however, ensure you are comfortable with paying the agreed-upon amount at any given time without affecting your savings and monthly budget.
Also Read: Understanding car insurance deductibles in the Philippines
Tip 4: Install an anti-theft device in your vehicle
By enhancing your car’s safety and security system, you’ll reduce the risk of theft, which in turn will make you a less risky client in the eyes of the insurer. Thus making them eligible for insurance discounts.
Tip 5: Maintain a clean driving record
Drive safely and ensure there are no traffic violations or claims in your name. All this will make you eligible for a no-claim bonus, which is a discount offered by insurers to clients with no claims in the past year.
Tip 6: Inquire about discounts and promos
Try asking about ongoing discounts or promos, and look out for seasonal offers.
Tip 7: Go for an annual premium payment plan, if possible
If your finances permit, consider opting for an annual premium payment instead of a monthly plan. This will help avoid service fees.
Also Read: Annual vs monthly insurance premiums: Which one saves more?
How to save money on car insurance renewal
Tip 1: Make sure to negotiate.
If you have decided to continue your relationship with the same insurance provider, be sure to negotiate the premium rates. Ask for a no-claim bonus if you haven’t filed a claim last year. Some insurers also offer loyalty discounts to their clients, so take advantage of them.
Tip 2: Reassess your coverage requirements.
It is essential to reassess your insurance coverage needs when renewing the policy. See what coverages do not apply to your current condition, like if you do not require Act of God coverage, if you have moved from a flood-prone area to a safe zone. This can reduce your premium substantially.
Car insurance providers with competitive pricing
Here is a list of insurance providers that are known to offer budget-friendly policy plans -
- Standard Insurance
- Prudential Guarantee
- Malayan Insurance
- FPG Insurance
You can review them all before making a final decision. Some are known for their affordable comprehensive packs, while others specialise in affordable CTPL and flexible add-ons for clients on a budget. In addition to the premium, consider the following attributes as well: claim processing speed, availability of digital services like online customer care and claim support, and coverage transparency & exclusions.
Photo from FreepikDo’s & don’ts when buying car insurance
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Do’s |
Don’ts |
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Car insurance myths to beware of
Myth 1: CTPL coverage is all you need; the rest is a waste of money.
Reality: While CTPL coverage is mandatory, it doesn’t cover you or your car. So, it’s better to pay a premium than to pay a hefty repair cost later.
Myth 2: Expensive policies with maximum coverage are reliable.
Reality: Choose a policy after thoroughly assessing your needs and budget. A thoughtfully curated policy will meet all your requirements without incurring significant expense.
Myth 3: Flood coverage is a part of a standard insurance policy.
Reality: Not necessary, while some insurance providers include ‘Acts of God’ coverage under comprehensive insurance, others don’t.
Bottom line
Are you looking for ways to save money on your car insurance? Then you have landed on the right page. Here, we have discussed seven excellent tips to cut your premium expense short, without compromising on coverage. For instance, with smart comparison, careful selection of coverage, safe driving practices, installing safety devices, and timely renewal, you can enjoy reliable coverage without overspending. Also, don’t forget to inquire about promos and ongoing discounts.
FAQs
Q1. I am extremely low on budget. What is the most affordable car insurance policy I can choose?
Ans. Consider CTPL insurance; it is not only the most affordable insurance available but is also required by law.
Q2. Is it worth spending on a comprehensive insurance policy?
Ans. A big YES. Comprehensive insurance is a highly recommended plan due to its wide coverage against damages caused by accidents, theft, collision, flood, fire, riots, and other similar events.
Q3. How can I reduce my car insurance premium?
Ans. Several tips can help reduce your premium, including opting for high deductibles, bundling policies, and maintaining a clean driving record.
Q4. Is it safe to buy car insurance policies online?
Ans. There are no issues, but only advantages to buying a policy online. Not only do you save time, but you can also get things done while sitting at home or in the office. However, opt for reliable partners like Zen Insure, which lists all the top insurance providers and is known for its fast & reliable services.
Q5. When is my insurance policy due for renewal?
Ans. Most car insurance policies are due for renewal one year after being issued. To determine the exact date, please refer to your policy or contact your insurance agent.
Q6. I have a 10-year-old car. Do I need to insure it?
Ans. Every car, whether old, new, or used, must have CTPL insurance, as it is mandatory by law. Furthermore, comprehensive insurance is recommended because unfortunate events like accidents, collisions, theft, or damage due to flooding can occur unexpectedly.
Q7. Will my car insurance premium reduce over time?
Ans. It is possible if you maintain a no-claim record or if your car's depreciation is low.
Q8. I want to get my car insured. What documents do I need?
Ans. Car insurance document requirements include the vehicle’s official receipt or certificate of registration, driver’s license, and valid ID.
Q9. Can I cancel a car insurance policy mid-term?
Ans. Yes, a policyholder is free to cancel and switch policies at any time. However, they may need to pay a penalty or receive only a partial refund.
Q10. What is the difference between CTPL and comprehensive insurance?
Ans. CTPL is a must, and it covers only third-party injury or death. Comprehensive insurance is highly recommended and covers both the policyholder and the insured vehicle against various risks.
Also Read: Top 7 questions to ask before buying any insurance policy
