After reading this article about liability insurance, read also: ON FIRE INSURANCE
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Insuring a motor vehicle is mandated by law
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A vehicle cannot be registered or its registration cannot be renewed without an insurance
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Compulsory Third Party Liability Insurance (CTPLI) is the most basic type of motor vehicle insurance
Movement is the universal language of personal freedom. – Louis Chevrolet.
Motor vehicle owners are expected to have more freedom of movement from one place to another especially this time of Covid-19 Pandemic. However, owning a motor vehicle is not as simple as buying a freshly baked cheese bread from a trusted bakeshop.
This is because the Land Transportation Office (LTO) does 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 a document proving compliance with the mandate of the law that said motor vehicle must be insured.
In the Philippines, the most basic type of motor vehicle insurance is the Compulsory Third Party Liability Insurance (CTPLI). CTPLI pays for expenses incurred as a result of the vehicle owner’s causing bodily injury or death to any third party in an accident arising from the use of the insured motor vehicle. This coverage is the minimum coverage required to register a motor vehicle with the LTO.
What is a motor vehicle?
The law says:
Motor Vehicle is any vehicle propelled by any power other than muscular power using the public highways. However, take note that road rollers, trolley cars, street-sweepers, sprinkles, lawn mowers, bulldozers, graders, fork-lifts, amphibian trucks, and cranes if not used in public highways, vehicles which run only on rails or tracks, and tractors, trailers and traction engines of all kinds used exclusively agricultural purposes are excepted. For trailers having any number of wheels, when propelled or intended to be propelled by attachment to a motor vehicle, they are classified as a separate motor vehicle with no power rating.
Who is a third party?
The law says:
Third party refers to any person other than a passenger. The term also excludes a member of the household, or a member of the family within the second degree of consanguinity or affinity, of a motor vehicle owner or land transportation operator, or his employee in respect of death, bodily injury, or damage to property arising out of and in the course of employment.
Furthermore, please bear in mind that passenger refers to any fare paying person being transported and conveyed in and by a motor vehicle for transportation of passengers for compensation, including persons expressly authorized by law or by the vehicle’s operator or his agents to ride without fare.
In simple terms, anyone outside your car or motor vehicle, for example, any unsuspecting pedestrian who is caught in the accident, is covered by CTPLI. On the other hand, those riding with you who aren’t your employees or a family member within the second degree of consanguinity or affinity are also considered third party persons. In this case, they are covered by the insurance. Meaning, if the motor vehicle accident is proven to be your fault, CTPLI will give you protection from liabilities arising from the accident.
To be clear, as the name suggests, only the expenses of third party victims are covered by the CTPLI. It does not cover expenses for personal injuries, damage to the insured motor vehicle, or damages to the property of any third party.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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