In the Philippines, the average brand new car costs almost half a million pesos nowadays. Considering the exorbitant price you pay, it is readily assumed that your vehicle is one of the biggest investments you would ever make in your life. To protect this expenditure and asset, getting an auto insurance should not be a matter of the question when—but rather, it should be automatic.
For this reason, it is imperative to include an auto insurance when you are calculating your budget. After all, you would not only be paying bills to defray the cost of your car loan—but your car insurance as well.
However, do not just simply buy whatever auto insurance you can immediately find. You need to be a little meticulous about how you select an insurance for your car—take into account more than just the monthly premium you will be paying and think about what the insurance policy actually covers.
Experts may encourage you to buy as much auto insurance as you can afford, but this is not necessarily helpful. To have a better understanding of what you are paying for, it is best if you know the basics of how it works and which coverage you should have and skimp on. Understand what the best auto insurance coverage is for you and select that.
So, if you are planning to buy a car insurance in the Philippines anytime soon, here are a few things you should know:
1.) Some of the most helpful coverages are the cheapest
Typically, liability insurance would be the most expensive and as it should be. Most common coverage limits would mean that your insurance is on the hook for a great deal of money for any kind of damage that you do. However, not all coverages are the same, and most of them would be capped by the value of your car.
You might neglect to get optional coverages such as roadside assistance, rental reimbursement, and gap coverage but these are actually necessary for optimal protection with just a little price increase. Paying a bit more than usual would not be all for naught. After all, it could potentially save you a lot of money in the future.
2.) Many factors would affect your insurance rate
Your car insurance rate does not only depend on the make and price of your car. Depending on the auto insurance company, the criteria can mean a myriad of things when it comes to evaluating an insurance application.
Guidelines in each company differ in the sense of which drivers they want to accept and how much they would charge those groups they consider to be at a higher risk. Underwriting is the term given to the process of evaluating an application. It is usually done automatically and by a software behind the scenes.
3.) Insurance prices vary by company
Much like how life insurance prices differ from one company to another, auto insurance prices vary a lot by the company as well. This is because each company has its own formula to assess and evaluate a risk. From there, they will evaluate how much you pay for the coverage.
As a consequence, no two insurers would offer the same price for the same policy. Considering this, comparing prices is paramount to choosing the best insurer. After all, if you do not compare rates, you would likely end up overpaying or lacking in some coverages.
4.) You will potentially pay more if you let your policy lapse
Auto insurance companies view drivers who have licenses but without car insurances as reckless, irresponsible and risky. Considering this, letting a policy lapse means that you are likely to pay more when you do buy insurance.
Prevent this, make sure to acquire and pay for your car insurance before your current policy is canceled.
5.) Discounts can make a significant difference
You might think a safe driving record, anti-theft devices, and car safety features are negligible things, but it actually contributes to a significant difference in what you pay for your auto insurance.
Many companies would offer you discounts for this such as this—most especially if you opt to pay in full.