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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:
A Compulsory Third-Party Liability (CTPL) Insurance policy provides coverage for injuries or death involving a third party, excluding injuries or fatalities to the vehicle owner, and non-third parties, as well as any damage to the insured vehicle or property owned by a third party.
CTPL is the required motor car insurance policy for registration or renewal of registration of any motor vehicle, as provided under Sections 387 and 389 of the Insurance Code. (Based on Section 1, Insurance Commission Circular Letter 2021-54, September 16, 2021.)
The Department of Transportation, through the Land Transportation Office (LTO), mandates the inclusion of Compulsory Third-Party Liability insurance coverage as a prerequisite for vehicle registration or renewal. The CTPL is a mandated car insurance for it provides financial protection in the unfortunate event of an accident where one’s vehicle causes bodily harm to a third party.
The Insurance Code of the Philippines provides:
“Section 387. 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.”
“Section 389. The Land Transportation Office shall not allow the registration or renewal of registration of any motor vehicle without first requiring from the land transportation operator or motor vehicle owner concerned the presentation and filing of substantiating documentation in a form approved by the Commissioner evidencing that the policy of insurance or guaranty in cash or surety bond required by this chapter is in effect.”
What is the coverage of CTPL?
A CTPL exclusively covers injuries or death of a third party and it does not extend coverage to the following:
- personal injury or death of the vehicle owner;
- injuries or death of non-third parties, such as household members, family within the second degree of relation, or employees; or,
- any damage to the insured vehicle or property belonging to a third party.
What is the validity of the CTPL?
As CTPL is a requirement for the renewal of motor vehicle registration, its corresponding CTPL likewise needs to be renewed annually.
Where to get CTPL?
A CTPL may be acquired from any licensed insurance company. Thus, pursuant to the case of Alliance of Non-Life Insurance Workers of the Philippines vs. Hon. Leandro Mendoza, explaining Section 3 of Department of Transportation Department Order No. 020-18 provides that applicants for registration are responsible for procuring CTPL Insurance from the list of qualified insurers issued by the Insurance Commission. To wit:
SECTION 3. Posting of List & Issuance of Insurers. — The LTO and LTFRB will post the list of Qualified Insurers in conspicuous places within the premises of their respective offices. The applicants are free to choose and secure the Insurance Policies from any of the Qualified Insurers, and all insurance premiums shall he strictly paid in the offices or authorized collection sites of the Qualified Insurers. The LTO and LTFRB will not issue any Certificate of Registration (COR) and/or Certificate of Public Convenience (CPC) unless the applicant has sufficiently shown that the Insurance Policies were secured only from the Qualified Insurers.
Since CTPL Policy is mandated for the protection of third parties from whatever injury or fatalities may occur, therefore, it is important to make sure that the policy taken is from legitimate insurance providers accredited by the LTO.
Read also: What is Compulsory Third Party Liability Insurance?
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