Motor Vehicle Insurance is Mandatory | The Manila Times

Dear PAO,

I recently bought a car, and I was told that I should have a motor vehicle insurance. In this connection, may I know if this is mandatory or a matter of preference? After all, having such a thing would entail another expense on my part. Thank you in advance for the clarification.

Jordan

Dear Jordan,

Please be advised that there are different types of insurance for a motor vehicle. Notably, one of which is the Compulsory Motor Vehicle Liability Insurance. For your guidance, Section 387 of Republic Act 10607, otherwise known as the "Insurance Code," dictates that it shall be unlawful for any land transportation operator or owner of a motor vehicle to operate the same on the public highways unless there is in force a motor vehicle liability insurance, viz:

"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. (Emphasis and underscoring supplied)

In connection with the foregoing, the law further says that the Land Transportation Office shall not allow the registration or renewal of registration of any motor vehicle without first complying with the Compulsory Motor Vehicle Liability Insurance. For brevity, Sections 389 and 390 of the Insurance Code read:

"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 a 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.

"Section 390. Every land transportation operator and every owner of a motor vehicle shall, before applying for the registration or renewal of registration of any motor vehicle, at his option, either secure an insurance policy or surety bond issued by any insurance company authorized by the Commissioner or make a cash deposit in such amount as herein required as limit of liability for purposes specified in Section 387. x x x. (Emphasis and underscoring supplied)

Consequently, apart from not being registered or renewed, any land transportation operator, owner of a motor vehicle, or any other person violating the mandatory requirement will be fined and/or imprisoned, to wit:

"Section 401. Any land transportation operator or owner of motor vehicle or any other person violating any of the provisions of the preceding sections shall be punished by a fine of not less than Five hundred pesos (P500.00) and/or imprisonment for not more than six (6) months. The violation of Section 390 by a land transportation operator shall be a sufficient cause for the revocation of the certificate of public convenience issued by the Land Transportation Franchising and Regulatory Board covering the vehicle concerned.

"Section 402. Whenever any violation of the provisions of this chapter is committed by a corporation or association, or by a government office or entity, the executive officer or officers of said corporation, association or government office or entity who shall have knowingly permitted, or failed to prevent, said violation shall be held liable as principals." (Emphasis and underscoring supplied)

In sum, although there are different types of motor vehicle insurance depending on the risk and coverage, it must be remembered that we have a minimum and mandatory type of motor vehicle insurance that is not just a matter of preference. Otherwise, one's failure to comply with the above-stated bare minimum may not only entail non-registration or non-renewal, but worst of all, may subject the latter to a fine and/or imprisonment.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

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