What is a TPL Insurance? TPL or Third-Party liability insurance is a type of casualty insurance that covers liability arising from accident or mishap. The liability may arise due to death, bodily injury, and/or damage to property suffered by a third party. The victim may directly claim against the insurer.
- Casualty insurance covers loss or liability resulting from an accident or mishap. It typically excludes losses covered by fire or marine insurance. Examples of casualty insurance include motor vehicle insurance, plate glass insurance, and theft insurance.
Here’s a list of companies offering TPL insurance accredited by the LTO.
Coverage of TPL Insurance
Third-party liability insurance for motor vehicles provides coverage for:
- Death of a third party
- Bodily injury to a third party
- Damage to property of a third party (“PD” or “Property Damage”)
- Death or bodily injuries of a passenger
Some companies label this as “Comprehensive TPL”, offering more protections like “Own-Damage” which covers damages due to acts of the owner.
CTPL
Compulsory Third Party Liability refers to the mandatory insurance coverage for motor vehicles to protect third parties from death, bodily injury, and/or property damage arising from the use of the insured vehicle.
- Requirement: It is unlawful to operate a motor vehicle on public highways without a policy of insurance or guaranty (in cash or surety bond) to cover third-party and/or passenger liabilities.
- Purpose: To indemnify for death, bodily injury, and/or damage to property of a third party or passenger arising from the use of the motor vehicle. The purpose is to provide compensation for innocent third parties or passengers due to the negligent operation of motor vehicles
- As of March 12, 2024, the minimum amount that can be claimed under a CMVLI (Compulsory Motor Vehicle Liability Insurance) is P200,000.
- No-Fault Indemnity: Claims for death or injury to any passenger or third party are paid without needing to prove fault or negligence, up to a certain limit (not less than P30,000.00).
- Direct Claim: In motor vehicle liability insurance, a third-party victim may directly claim against the insurer.
- Transfer of Ownership: The transfer of vehicle ownership does not automatically suspend the compulsory motor vehicle liability insurance policy.
No-Fault Indemnity
“No-Fault Indemnity” – Claims for death or injury to a third party or passengers are paid without needing to prove fault or negligence, up to a certain limit (currently not less than P30,000.00).
Generally, to claim for death or injury, the claimant must prove negligence on the part of the defendant. But in no-fault indemnity, proving negligence is not required.
The following proofs are sufficient to substantiate a no-fault claim:
- Police report of accident
- Death certificate and evidence establishing the proper payee
- Medical report and evidence of medical or hospital disbursement for which a refund is claimed
- A no-fault claim can be made against only one motor vehicle
- A “no action clause” is not allowed if there is direct liability to a third party.
- Protection and Indemnity (P&I) clubs offer insurance against third-party liabilities, especially for shipowners.
- The limited liability rule in maritime law applies to liability to third persons.
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