By Ramon Tomeldan
The lucrative car insurance industry is moving forward onto the digital highway with the inclusion of compulsory third-party liability (CTPL) in online transactions, a move which is expected to enhance the insurance business potential.
It’s actually the CTPL’s Certificate of Coverage (CoC) that’s being primed for digitization through the DBP Data Center as the clearinghouse for non-life insurers.
By its sheer size, the car insurance industry encompasses a wide range of downstream trades, including brokers, sales agents, middlemen, moonlighting professionals and the omnipresent fixtures in land transport offices.
The independent Blue Weave Consulting estimated the value of the car insurance industry at $2.6 billion in 2024. This was roughly equivalent to P140 billion (at P55 to $1). In that same year, motorists paid P28.8 billion for their vehicle insurance premiums, according to the Insurance Commission.
With the addition of CTPL’s CoC to the online business, traditional pen-and-paper transactions will soon give way for a complete digitalization of land transport agencies.
Pushing the envelope, the Insurance Commission has alerted non-life surety companies to look into the viability of CTPL’s certificate of coverage (COC) to be pre-validated online before being registered with the Land Transportation Office.
On May 30, 2025, Insurance Commissioner Reynaldo A. Regalado issued IC Advisory No. 2025-102 to all non-life insurance companies, advising them of a government directive regarding the Certificate of Coverage (CoC) for car insurance.
Excerpts from the commissioner’s advisory follow: “The Insurance Commission (IC) informs all concerned stakeholders of the Department of Transportation’s (DOTr) directive to the Land Transportation Office (LTO) to coordinate with the DBP-Data Center, Inc. (DCI) to determine the viability and necessity of the implementation of various digitization initiatives, including but not limited to: Online prevalidation of motor vehicle Certificates of Coverage (COC) for Compulsory Third Party Liability (CTPL) insurance.”
In his advisory, Regalado invoked “the government’s push for enhanced digital services and streamlined inter-agency coordination.”
Regalado added that the IC expresses its support for “initiatives which aim to improve service delivery, reduce processing time, and promote transparency.”
Under the IC advisory, the CoC is proposed to be submitted online to the LTO through DBP-Data Center Inc. (DCI) as proof of payment, which must be pre-validated by the insurers.
While discussions on the matter are ongoing, the agency encourages non-life insurance companies “to stay updated on developments and be prepared for future coordination,” Regalado said.
The IC advisory stemmed from a memorandum the Department of Transportation (DoTR) issued on April 21, 2025.
DoTr Secretary Vivencio Dizon explicitly directed the LTO to coordinate with the DCI in determining the viability and necessity of implementing online pre-validation of MV COC-TPL, along with other digitization measures concerning land transportation.
This directive raises several questions that need to be clarified by insurance firms, which, after all, will be the ones to process the CoCs. However, the umbrella group PIRA (Philippine Insurers and Reinsurers Association) remained silent on the issue despite MBI’s email request for comment as of press time.
There are questions that beg for answers: What are the criteria for pre-validation? Is the system tamper-proof? Are there safeguards in place to prevent the use of fake CoCs?
The integrity of CoCs and CTPLs must be preserved, or the criminal geniuses in our midst will only make a great mockery of the government’s digital thrust, an industry expert said.
According to the online auto trading platform Mobee Cars, a CoC serves as proof of payment for CTPL insurance, which in turn covers injuries and damages to other people in the event of an accident. CTPL, required by law, costs around P1,000 to P2,000 annually.
Comprehensive insurance is a different animal altogether, Mobee Cars says. It covers a significant portion of the bill for any damage to your car, including injuries to you and your passengers in the event of an accident or natural disaster. Insuring a motor vehicle can cost between P15,000 and P30,000 per year in premiums, which range from 1.5% to 3% of the car’s value.
Incidentally, the Highway Patrol Group (HPG) reported that last year, 2,747 people lost their lives in road accidents, representing a 35.32 percent increase from 2023. The HPG, in a recent report, stated that vehicular crashes increased by 27.6 percent, from 24,495 cases in 2023 to 31,258 incidents in 2024. It was not readily known whether those motorists involved in those road accidents had comprehensive or CTPL insurance coverage.
