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No, your CTPL won’t pay for your car’s damage

Here’s one usual, quick sad story on car insurance: A car owner is speaking to an insurance agent, ready to file a claim. His voice is frantic, irate, and annoyed – he can’t believe that the CTPL policy he paid almost a year ago won’t cover an accidental damage to his car.

But the agent doesn’t even have to consult a superior. The answer is a fast no.

Mandated by the Land Transportation Office (LTO) of the Philippines, a compulsory Third-Party Liability (CTPL) Insurance is a required insurance policy during one’s annual motor vehicle registration.

The main purpose of CTPL is to ensure the safety of the general public against possible dangers caused by motor vehicles on the road.

As the name suggests, the CTPL policy only concerns the third-parties, meaning all other persons affected, excluding the passengers. Chapter VI, Section 373c of the Insurance Code of the Philippines define “third party” as follows:

“THIRD PARTY shall refer to any person other than a PASSENGER as defined in the law and shall also exclude a member of the household, or a member of the family within the second degree of consanguinity or affinity of the vehicle owner, or his employee in respect to death, bodily injury, or damage to property arising out of and in the course of employment.”

This clarifies: contrary to common and popular misunderstanding, CTPL will not cover losses or damages to the insured vehicle. The policy also cannot be upgraded, customized, or applied for an addendum because the maximum coverage claimable under CTPL is a fixed Php 100,000. This amount compensates for treatment for bodily injury, disablement, or death of the affected third party.

The Compulsory Third-Party Liability (CTPL) insurance is a mandate to enable security and certainty to public pedestrians in case any untoward incident involving motor vehicles occur on the road. It is not a substitute for comprehensive car insurance, which is an extensive option a car owner also must consider.


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