Definition of "Third Party" in Motor Vehicle Insurance Context
- "Third Party" excludes:
- Passengers as defined in the section
- Members of the motor vehicle owner's household or immediate family (up to second degree of consanguinity or affinity)
- Employees of motor vehicle owners in respect of employment-related injury or death
Definition of Insurance Policy
- Refers specifically to insurance contracts covering passenger and third-party liability for death or bodily injuries resulting from motor vehicle accidents.
Mandatory Insurance or Guaranty for Motor Vehicles
- Land transportation operators and motor vehicle owners must have an active insurance policy, cash guaranty, or surety bond covering indemnity for third-party or passenger death or injury arising from vehicle use on public highways.
Requirements for Registration or Renewal of Motor Vehicle Registration
- Land transportation operators must secure insurance or guaranty with minimum liability amounts based on vehicle passenger capacity:
- 26 or more passengers: ₱50,000 minimum total
- 12 to 25 passengers: ₱40,000 minimum total
- 6 to 11 passengers: ₱30,000 minimum total
- 5 or fewer passengers: ₱5,000 multiplied by authorized capacity
- Insurance or guaranty covers death or injury to third parties and/or passengers.
- Cash deposits or surety bonds may be utilized by the Commissioner if indemnity claims are unsettled; deposits must be replenished within 60 days.
- Deposits may be invested in government bonds or securities.
- Private vehicle owners must secure insurance or guaranty with minimum liabilities according to vehicle type and weight, e.g.:
- Bantam and Light private cars: ₱20,000
- Heavy private cars: ₱30,000
- Tricycles, motorcycles, scooters: ₱12,000
- Vehicles over 3,930 kilos: ₱50,000
- Commissioner may establish indemnity schedules for claims.
Prohibition of Unreasonable Denial of Insurance Policies
- Insurance companies must not unreasonably deny issuance or renewal of insurance policies or surety bonds.
- The Land Transportation Commission may require a cash deposit certificate in lieu of insurance if denial occurs.
- Only authorized insurance companies may issue the required policies or surety bonds.
- Insurance companies refusing issuance without just cause face immediate withdrawal of casualty and/or surety licenses.
Claims Procedure and Prescription
- Claimants must provide written notice to the insurance company without delay, including medical certification of injuries.
- Notice of claim must be filed within six months of the accident; otherwise, the claim is waived.
- Legal action for injury damages must be initiated within one year of the accident; failure to do so results in prescription of the claim.
Repeal and Modification of Inconsistent Laws
- All inconsistent laws, decrees, rules, and regulations are repealed or modified accordingly.
Effectivity
- The amendments take effect immediately upon issuance.