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The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Compulsory Third-Party Liability (CTPL) insurance is required for motor vehicle registration, while Comprehensive Motor Vehicle Insurance is optional. Motor vehicle owners may choose to purchase the comprehensive insurance for extra protection, but unlike CTPL, it is not a requirement set by the Land Transportation Office (LTO) for vehicle registration.
The Compulsory Third-Party Liability (CTPL) motor insurance is a mandatory and prerequisite insurance for the registration of a motor vehicle. As stipulated by law, car or motorcycle owners are required to purchase a CTPL insurance policy when registering their vehicles with the Land Transportation Office (LTO) each year.
The CTPL is primarily intended to provide compensation for the death or bodily injuries suffered by innocent third parties or passengers as a result of a negligent operation and use of motor vehicles. The victims and/or their dependents are assured of immediate financial assistance, regardless of the financial capacity of the motor vehicle owners. The insurer’s liability accrues immediately upon the occurrence of the injury or event upon which the liability depends, and does not depend on the recovery of judgment by the injured party against the insured. (First Integrated Bonding and Insurance Company, Inc. v. Hernando, G.R. No. 51221, July 31, 1991)
A Compulsory Third-Party Liability (CTPL) policy protects the driver of the motor vehicle from liability for injuries or death caused to a third party as a result of a vehicular accident. In simpler terms, CTPL covers only third-party victims, not the driver or passengers of the insured vehicle.
The CTPL does not cover:
- Personal injury or death of the vehicle owner.
- Injuries or death of a non-third party, specifically household members, or relatives within the second degree of consanguinity or affinity, or employees.
- Damage to the insured vehicle or property damage to a third party.
In contrast, Comprehensive Motor Vehicle Insurance is optional and can be purchased by a motor vehicle owner seeking additional protection. This insurance is not a pre-requisite for the operation of motor vehicles. It covers risks that the CTPL does not, including damage to the insured vehicle and third-party property damage.
Comprehensive motor vehicle insurance typically includes the following components:
- No-fault indemnity
- Loss or damage coverage
- Excess liability insurance, which includes excess bodily injury, also known as Voluntary Third-Party Liability (VTPL-Bodily Injury) and third-party property damage (VTPL-Property Damage)
Included in the comprehensive motor vehicle insurance is the no-fault indemnity insurance. The essence of “no fault indemnity” insurance is to provide victims of vehicular accidents or their heirs immediate compensation, although in a limited amount, pending final determination of who is responsible for the accident and liable for the victims’ injuries or death.
In addition to the standard components of comprehensive motor vehicle insurance, the policyholder has the option to include coverage for acts of God, such as flooding, earthquakes, storms, and riots, by paying an additional premium.
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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