IN the Philippines, before anyone can register a motor vehicle with the Land Transportation Office (LTO), he is required to secure a compulsory third party liability (CTPL) insurance.

The purpose of this insurance is to protect the owner of the vehicle from providing financial obligations to a third party who is injured or killed by the insured vehicle.

But who is the third party referred to in this type of insurance? Is it the driver? The public utility vehicle (PUV) passengers? A nonpaying occupant of the vehicle? A passerby?Advertisements

Despite being a requirement among vehicle owners and operators, many still do not fully understand how the CTPL insurance truly works.

Worse, many people still have the wrong belief that it protects the owner or the driver and any passenger of the vehicles involved in an accident from monetary liabilities.

If not the owner or the driver or the passenger, who can then benefit from the CTPL insurance? Who gets paid and by how much?

The main beneficiary of a CTPL insurance is a third party who is any person affected by the vehicular accident other than a fare-paying passenger, the household or family members and employees of the vehicle owner.Advertisements

An innocent pedestrian walking along the sidewalk or a bystander unfortunately injured in a vehicular accident is considered a third party.

On the other hand, a PUV passenger is not considered a third party and will not benefit from a CTPL insurance.

This is so because, under the Insurance Code, a passenger is any fare-paying person inside the vehicle, even those persons expressly authorized by law or by the vehicle driver or his agents to ride without fare.

Also not considered a third party are the household members (such as a housemaid or a houseboy) or family members within the second degree of consanguinity (children, parents, siblings, grandparents, and grandchildren) and affinity (spouse, parents-in-law, grandparents-in-law, siblings-in-law, and children-in-law) of the insured motor vehicle owner who is at fault.

Furthermore, an employee of the owner of the motor vehicle who is at fault is also not considered a third party.

In case the third party tragically passes away due to the accident, his heirs may avail from the insurance company of the vehicle owner at fault an amount up to P100,000 (P70,000 for death benefits, and P30,000 for funeral and burial expenses).

However, if the third party has been injured, he may avail of some amount [but not exceeding a total of P100,000] depending on the “schedule of indemnities for bodily injuries” in the insurance policy, as long as he can support it with documentary proof like medical certificates or official receipts of hospital expenses.

Any claim that exceeds those covered by the CTPL insurance will be shouldered by the driver or owner of the vehicle who is at fault. It is also important to note that CTPL insurance does not cover property damages, even of the third party.

Victims of a vehicular accident may immediately avail a maximum of P15,000 under the “no-fault indemnity clause” of the CTPL insurance policy pending the investigation of who is at fault.

In other words, the victims will be immediately compensated under this rule without the need to prove who is at fault.

However, claim should be made against the insurer of the vehicle where the occupant victim is riding, mounting or dismounting.

To better protect themselves from further liabilities, or those beyond what is covered under a CTPL insurance, vehicle owners are given the option to obtain a comprehensive vehicle insurance policy, the coverage of which may vary depending on the agreement of the issuing company and the choice of the policyholder.

Comprehensive car insurance can provide protection against loss and/or damage of vehicle, excess bodily injury, property damage, no-fault indemnity cover, and auto passenger personal accident.

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