PUBLIC utility vehicles (PUV) that ply busy urban streets and countryside roads every day are faced with dangers that may put people they carry in peril. So, when a PUV figures in a road accident that kills or injures a passenger, the driver or operator may be held liable.
The law requires PUV operators to secure Passenger Personal Accident Insurance (PPAI), on top of the Compulsory Third-Party Liability (CTPL) insurance. This ensures PUV passengers of getting monetary benefits after an accident that results in death or injuries. Without PPAI, the Land Transportation Franchising and Regulatory Board (LTFRB) will not issue a certificate of franchise and the PUV will not be allowed to operate.
Under PPAI, the heirs of a killed PUV passenger may receive death benefits amounting to a maximum of P400,000.
Meanwhile, injured passengers get varying benefits that depend on the aggregate limit per type of PUV.
For instance, up to P200,000 for permanent total disability, loss of two or more limbs, or total and irrevocable loss of sight of both eyes; up to P80,000 for loss of hearing in both ears, up to P30,000 if only one ear; and some specific amounts for other bodily injuries as provided in the policy.
The PPAI also covers PUV drivers and conductors that died due to the accident but only in terms of burial assistance and casket costs, ambulance assistance, medical implant, and one-time educational assistance for one child of a deceased driver or conductor.
In addition, the PPAI also provides legal assistance services amounting to P15,000, which may include attorney’s fees and other necessary legal services, provided official receipts are presented. In situations where a legal case is filed against the PUV driver, a maximum bail bond assistance amounting to P45,000 shall also be covered under PPAI.
The insurance providers are only required to pay for the death benefits of P400,000 per passenger subject to the authorized seating capacity of a PUV. For instance, the authorized seating capacity of a jeepney is between 15 to 23, so the insurance company shall only be liable within aggregate limit of any one accident from P3 million to P9.2 million.
It is important to note that the PPAI follows an “all risk-no fault” policy, which means that the authorized PUVs will be covered despite the following conditions:
— the cause of accident is a mechanical failure of the insured vehicle;
— the proximate cause is due to the negligence, or fault of the driver of the other vehicle, mechanical failure of the other vehicle, or due to force majeure or acts of God (e.g. natural disasters);
— the driver, at the time of the accident, is unauthorized, under the influence of liquor, under the influence of illegal or prohibited drugs, or found to be reckless or negligent;
— there is a violation of designated route (e.g. out-of-line), the situation involves unprovoked homicide, murder, and/or assault, including hold-up and kidnapping incident, or if persons or passengers are boarding or disembarking from the vehicle or immediately thereafter.
The PPAI program was first implemented in 1999 by the LTFRB, being the agency tasked to authorize and regulate the operation of PUVs in the Philippines. The early implementation of the PPAI program was through a two-group system, where each group was comprised of at least ten insurance companies. The two-group system addressed complaints of proliferation of fake insurance policies, predatory pricing among competing insurance firms, proliferation of fixers in the premises of LTFRB, and the moonlighting of LTFRB personnel who induce operators to secure their policies from favored companies.
LTFRB continued to oversee the PPAI program between 2013 and 2018 under several agreements between the board and the accredited insurers.
However, in August 2018, the Department of Transportation (DoTr) ordered the Insurance Commission (IC) to take over the PPAI program, including the evaluation and accreditation of insurance providers under the program.
A transition period was set to allow the IC to properly evaluate and undertake consultations concerning PPAI being under its care, given the short period of time between the DoTr order and the nearing expiration of the 2015-2018 PPAI program under the LTFRB.
During the transition period, the status quo is being adopted, wherein the two-group system will be maintained, and existing LTFRB-accredited insurance companies will continue to provide insurance coverage for the PPAI on a hold-over capacity, except for changes on lead insurer within the group.
Furthermore, the existing groups shall remain open to all insurance companies that may wish to participate in the program.
Accreditation process has also been postponed during the transition period. Lastly, the IC will also utilize this period to undertake studies and issue necessary guidelines regarding the necessity to adopt a new system or improve the current one.
PAMD Power Point Presentation on PPAI
Insurance Commission Circular Letter 2018-59 https://www.insurance.gov.ph/wp-content/uploads/2018/11/CL2018_59.pdf
Insurance Commission Circular Letter 2005-30
The author is the Deputy Commissioner for Legal Services of the Insurance Commission. He may be contacted at [email protected]