Insured Worry Free Driving

It all starts when you tell yourself you deserve insurance that adequately covers your specific vehicle without the extra costs you don't need. You want an insurance policy that is packed but lean. With the many tools you can use today for research, shopping your policy is no longer as hard and confusing. This article makes the task even easier by compiling tips and expert advice on getting car insurance.

1. First, be aware of what drives up premiums

The price of your vehicle dictates the premium because it indicates the replacement cost if it is stolen or totaled in an accident. Repair costs of the vehicle, which involves parts and labor, also factor into the premium.

Premiums vary widely by vehicle type. For example, insuring a sports car costs twice or thrice the insurance amount for an ordinary model. Some models have high injury claims, some are most frequently stolen, and then again some are relatively cheap to insure. Because such data is hard to come by in the Philippines, insurance companies use their own statistics and experience with particular vehicles or driver demographics. This is why one company may charge more for a particular vehicle than the next company.

2. Figure out the amount of coverage you need

There is a basic coverage required by law when you register your vehicle with the Land Transportation office (LTO), and that is Compulsory Third Party Liability (CTPL). Apart from this, you can decide how covered you want to be with your policy. Here are some of the most basic components that make up the total cost of a usual insurance policy:

• Own Damage: Covers damage to your car from accidents not caused by nature. The coverage is based on its fair market value, and carries a deductible which is the amount per claim you need to pay before the insurance takes effect. For example, if you have a Php10,000 claim and your policy has a Php2,000 deductible, you will pay Php2,000 and your insurance will pay Php8,000.

• Theft: Covers loss of your car due to theft. The coverage is based on its fair market value and carries a deductible as well.

• Voluntary Third Party Liability (VTPL) – Bodily Injury: Covers injury or death claims against you as well as legal liabilities in case your car hits or kills a pedestrian or passengers of other vehicles.

• Voluntary Third Party Liability (VTPL) – Property Damage: Covers claims for property that your car damages in an accident.

• Acts of Nature: Covers loss or damage to vehicle due to natural calamities like floods, typhoons, earthquakes and the like.

• Auto Personal Accident: Covers injuries caused to you or occupants of your car.

Some companies offer additional products such as coverage for valuable items in your car. Base your decision on reasonable probabilities rather than worst-case scenarios to avoid excess coverage. Look at your driving habits: do you have a record of fender-benders or more serious car incidents? Do you live or frequent areas unsafe for your vehicle?

Regarding Third Party Liability, some experts recommend that you should get enough coverage to protect your assets and income if you have a lot of them. In case of an accident where you’re at fault and the bodily, property, or legal costs to the third party exceed your coverage, attorneys can go after your wealth.

3. Review your current coverage

Before you call up insurance companies or ask for referrals, check your driving record, your current policy, and the premiums you are paying. Your latest insurance bill should indicate what you are paying for. Take note of the items in your coverage, calculate how much they cost you annually or monthly, and put them in context with your driving record. Your current company might seem pretty reasonable, but you won’t find out until you shop.

4. Request for quotes

The easiest way to start shopping is to go online. Some companies offer instant quotes when you fill out a form over the Internet. For a complete list of licensed non-life insurance companies in the Philippines, go to www.insurance.gov.ph where they are ranked based on financial health. Remember to be patient; even the largest insurers in the country will want you to call them to discuss your situation. Be ready with your current policy, car registration, and driver’s license as you talk to them. Ask for the quote to be faxed or emailed so you have a record.

5. Take comparison notes on the following:

• Rates for different types of coverage

• The company payment policy such as when payments are due, penalties in late payments, etc.

• Special promotions or discounts that might be offered or are being offered

• Feedback about the insurance company through online forums or blogs

6. Find out how you can get discounts

Make sure to explore opportunities where you can get discounts. Salespeople are often eager to oblige especially if you have a good driving record. Other factors like the safety features in your car, connections and influence can slash off some pesos as well. Sell yourself--look at it as earning money by saving it.

7. Look beyond the price tag

You can now cross-out some companies from your list and more or less pinpointed the less expensive ones. But will quality suffer with quantity? Most people think it is worth paying more to big insurers because of their reputation. Better have the facts than rely on instincts:

• Check sources that compare insurance companies, or see what people say about different insurance companies. What are the consumer complaint ratios?

• Talk to automotive body shops and dealerships and ask for recommendations.

• Insurance agents can give additional information that you can’t obtain through other sources.

• It won’t hurt to be aware of the company’s financial health. Look for recent business articles or check the stock market index.

8. Keep your legal rights

If you’ve decided on the company, make sure to read the actual policy before you sign. If there are particular clauses that bother you, ask if they can be crossed out. After all, a contract is a mutual agreement. It is better to take long in finding the right company than find one easily and spend time fighting with them over claims.

Make sure to cancel coverage with your old company. Keep a copy of your insurance policy in your car or wallet (the latter being better as it avoids the chance of a car thief having possession of all documents he will need to prove the vehicle as his) and the original one safe in your house.