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    Insurance Basic

    Uploaded by

    Mark Cristian Sayson
    The document outlines the basic coverage provided by a motor car insurance policy, including compulsory third party liability, loss or damage coverage, excess bodily injury coverage, excess liability insurance, and personal accident coverage. It also lists the requirements for filing own damage claims, including documents needed like registration certificates, driver's licenses, police reports, insurance policies, and repair estimates. Participation fees refer to the amount policyholders pay when filing an insurance claim to cover part of the repair or damage costs, and insurers charge these fees to deter fraudulent claims and prevent financial losses for the company. Rates are typically 0.5-1% of the car's value. Depreciation may also apply, with the policyholder paying a percentage of

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    Insurance Basic

    Uploaded by

    Mark Cristian Sayson
    125 views4 pages
    The document outlines the basic coverage provided by a motor car insurance policy, including compulsory third party liability, loss or damage coverage, excess bodily injury coverage, excess liability insurance, and personal accident coverage. It also lists the requirements for filing own damage claims, including documents needed like registration certificates, driver's licenses, police reports, insurance policies, and repair estimates. Participation fees refer to the amount policyholders pay when filing an insurance claim to cover part of the repair or damage costs, and insurers charge these fees to deter fraudulent claims and prevent financial losses for the company. Rates are typically 0.5-1% of the car's value. Depreciation may also apply, with the policyholder paying a percentage of

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    The document outlines the basic coverage provided by a motor car insurance policy, including compulsory third party liability, loss or damage coverage, excess bodily injury coverage, excess liability insurance, and personal accident coverage. It also lists the requirements for filing own damage claims, including documents needed like registration certificates, driver's licenses, police reports, insurance policies, and repair estimates. Participation fees refer to the amount policyholders pay when filing an insurance claim to cover part of the repair or damage costs, and insurers charge these fees to deter fraudulent claims and prevent financial losses for the company. Rates are typically 0.5-1% of the car's value. Depreciation may also apply, with the policyholder paying a percentage of

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    125 views4 pages

    Insurance Basic

    Uploaded by

    Mark Cristian Sayson
    The document outlines the basic coverage provided by a motor car insurance policy, including compulsory third party liability, loss or damage coverage, excess bodily injury coverage, excess liability insurance, and personal accident coverage. It also lists the requirements for filing own damage claims, including documents needed like registration certificates, driver's licenses, police reports, insurance policies, and repair estimates. Participation fees refer to the amount policyholders pay when filing an insurance claim to cover part of the repair or damage costs, and insurers charge these fees to deter fraudulent claims and prevent financial losses for the company. Rates are typically 0.5-1% of the car's value. Depreciation may also apply, with the policyholder paying a percentage of

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    The key takeaways are that a participation fee is an amount billed by insurance companies to policyholders when making a claim, and it is charged to deter petty claims and prevent fraud. It is important for determining costs covered in a claim.

    A participation fee is an amount the policyholder pays when filing an insurance claim. Insurers charge it for three main reasons: the driver has liability, it deters petty claims, and prevents fraud. It is part of the protocol for processing claims.

    Participation fees usually range from 0.5-1% of the car's market value. For example, a P800,000 sedan with P70,000 in repairs would have a P4,000 fee. Some insurers charge P2,000-P3,000 flat rates for private and commercial vehicles respectively.

    BASIC COVERAGE OF THE MOTOR CAR INSURANCE POLICY

    1. Compulsory Third Party Liability (CTPL)

    1. It is a pre-requisite for motor car registration.


    2. Standard amount of coverage of CTPL is PHP 100,000.00

    2. Loss or Damage ( Actual Amount of Vehicle / Fair Market Value )


    The Insurance company will undertake to cover the insured against loss or damage to
    the insured vehicle including its declared accessories (built-in) resulting from:

    1. Accidental collision
    2. Fire , external explosion
    3. Malicious act
    4. Damage while on an inland transit

    3. Excess Bodily Injury (EBI) – (Death/ Bodily Injury)


    In case the limit of liability for CTPL has been exhausted, this section will cover the
    excess subject to the provision of limits stated therein.

    4. Excess Liability Insurance (Property Damage)


    Covers liability of the Insures against damage to third party property, subject to the
    limits and provisions of the policy.

    5. Personal Accident
    Refers to the insurance, which provides benefits/ indemnity in case of loss/or to the life
    or well-being of a person arising out of an accident.

    MOTOR CLAIMS REQUIREMENTS

    1. Report the accident to the Motor Car Claims Department / Insurance Company
    2. Submit the following documents for the early Processing and settlement of Claim

    FOR OWN DAMAGE CLAIM

    1. Photocopy of LTO Registration Certificate and latest O.R./ Notice of Accident


    Report
    2. Photocopy of Drivers License and O.R.
    3. Police Reports or Affidavit of Damage duly notarized
    4. Photocopy of Comprehensive Insurance Policy with O.R. of premium payment
    5. Repair Estimates
    INSURANCE
    Insurance companies, as part of their protocol, ask their clients to cough up money for
    participation.

    What does “participation fee” mean and why is it important in making claims? Here are
    some things you should know.

    What is a participation fee?

    A participation fee is the amount billed by insurance companies to their clients


    whenever they make an insurance claim. If the policyholder would like the insurer to
    cover the cost of repairs or other types of damages such as bodily injury, the latter will
    invite the former to “participate” in shouldering the expenses stemming from the
    insurance claim.

    Why do insurance companies charge participation fees?

    There are three main reasons insurers require clients who file for auto insurance claim
    to pay participation fees.

    First—and this is more common in comprehensive insurance policies with own damage
    clause–the driver has a liability in any accident, which means that he should also be
    charged by a fine for participation. Second, deductibles will deter policyholders from
    making petty claims that are below the minimum insurable claim. Finally, participation
    fees will prevent fraudulent claims that will cause serious financial trouble to the
    company.

    How much do insurers usually charge for participation fees?

    Despite qualms that participation fees will render the insurance policy useless since
    they will also ask the policyholders to pay a fee, the deductions for such is not as big as
    what people think.

    Most insurance companies will ask you to pay out-of-pocket costs before they cover the
    rest of the expenses based on your car’s type and market value:

     For smaller vehicles, policyholders are usually billed 0.5 percent of the car’s total
    market value as participation fee.
     Meanwhile, insurers ask owners of bigger vehicles such as vans and trucks to
    pay one percent of the car’s market value as deductible.
    For instance, a sedan with a current market value of P800,000 with repair expenses
    totaling P70,000 will have the following figures for participation fee:

     The car’s deductible will be P4,000 based on the 0.5 percent participation fee
    rate of the car’s market value, which is P800,000.
     Meanwhile, the total amount to be shouldered by the car insurance company will
    be P66,000, which is the total repair cost (P70,000) minus the participation fee
    (P4,000).
     Other insurance companies charge private and commercial vehicles with a
    participation fee of P2,000 and P3,000, respectively.

    How does car depreciation come into play?

    Insurance companies will ask the policyholder to shoulder a certain percentage of the
    parts that need to be replaced to get the vehicle back in good running condition. To
    determine the rate of parts costs insurance holders, they use the handy depreciation
    guide for the following rates:

    Brand new up to three years old Exempted from depreciation fee

    Three years and one day up to four years 20 percent of the parts value

    Four years and one day up to five years 25 percent of the parts value

    Five years and one day up to six years 30 percent of the parts value

    Six years and one day up to seven years 35 percent of the parts value

    Over seven years 40 percent of the parts value

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