I am trying to understand the process of insurance in the Philippines. My car and motorcycle are registered in my name. But I am clueless on how my insurance would help me in case my vehicles were stolen. I paid the annual registration fee of approximately P5,000 for the insurance of my vehicles. Can you please educate me on how much am I covered by this insurance in case of loss of my vehicles?
A contract of insurance is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event (Section  [a]Republic Act No. 10607, The Insurance Code).
For motor vehicles, registered owners are required to purchase a third-party liability (TPL) insurance when registering or renewing the registration of a vehicle with the Land Transportation Office (LTO). This compulsory requirement is pursuant to Article 387 of the Insurance Code which provides that “it shall be unlawful for any land transportation operator or owner of a motor vehicle to operate the same in the public highways unless there is in force in relation thereto a policy of insurance or guaranty in cash or surety bond issued in accordance with the provisions of this chapter to indemnify the death, bodily injury, and/or damage to property of a third-party or passenger, as the case may be, arising from the use thereof.”
As mentioned, the TPL only indemnifies the death, bodily injury and/or damage to property of a third-party or passenger which is incurred by an authorized driver of a registered vehicle. Thus, liability of insurance companies for loss or damage of the vehicle is not included in the TPL. Some insurance companies, however, offer comprehensive insurance coverage to registered owners. The comprehensive insurance may cover loss or damage to vehicle due to fault of the registered owner, third person or even by reason of unforeseen events. Since the insurance company would assume more responsibility, registered owners are required to pay higher premium, the amount of which depends on the insurance companies.
In your case, we cannot state whether you will be indemnified by your insurance in case of loss of your car or motorcycle. It is best to examine your policy to check if loss of your motor vehicles is covered by your insurance. You may also inquire with your insurance company as to the coverage of your insurance policy.
We hope that we have answered your query. Our legal opinion may vary if other facts are stated or elaborated.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to email@example.com