LTO Pushes for Higher CTPL Benefits and Faster Insurance Payouts for Road Accident Victims

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The Land Transportation Office (LTO) is stepping up its efforts to make motor vehicle insurance truly beneficial for motorists and accident victims. In partnership with the Insurance Commission, the agency is pushing for major reforms in Comprehensive Third Party Liability (CTPL) insurance, a mandatory requirement for vehicle registration and renewal.

This initiative comes in the wake of the tragic truck accident on the Katipunan Flyover in Quezon City on December 5, 2024, where a vehicle with faulty brakes crashed into multiple cars, leaving four people dead and over 20 others injured. The incident has highlighted the urgent need for an insurance system that provides adequate financial support and swift assistance to victims.

Why CTPL Needs a Major Overhaul

LTO Chief Assistant Secretary Atty. Vigor D. Mendoza II led discussions with Insurance Commission head Atty. Reynaldo Regalado on January 28, 2025, to tackle long-standing issues with CTPL insurance. The primary concerns raised were:

The long processing time for claims – Many motorists don’t even bother filing CTPL claims because the payout process takes too long.

The perception that CTPL is useless – Since insurance claims are rarely received on time, many vehicle owners see CTPL as just another bureaucratic hurdle rather than an actual safety net.

"The common belief is that CTPL is useless. Motorists see it as just another requirement for vehicle registration rather than a real benefit," Mendoza explained.

The LTO wants to change this perception by ensuring that CTPL serves its true purpose: providing immediate financial relief to accident victims.

Key Proposed Reforms

During the meeting, two major reforms were proposed:

1. Increased CTPL Benefits

Right now, the maximum compensation for victims is only ₱200,000—a shockingly low amount given the cost of medical treatment and funeral expenses. In the Katipunan Flyover accident, this sum had to be divided among four fatalities and over 20 injured individuals, making it grossly inadequate.

LTO is pushing to increase the benefits to ensure that victims receive sufficient financial assistance without making insurance premiums too expensive for motorists.

2. Faster Insurance Payouts

One of the biggest problems with CTPL is that claims take too long to process. Mendoza emphasized that immediate financial assistance is critical in road accidents:

"Timing is everything in an accident. Immediate assistance can be the difference between life and death. If victims can be rushed to the hospital without delay, lives can be saved."

To address this, the LTO is exploring:

A hotline that motorists can call for real-time assistance and insurance claim guidance.

Mandating insurance providers to release emergency funds immediately to victims instead of making them wait for the full claims process.

Support from Other Stakeholders

The push for higher benefits and faster payouts is gaining support. Pasang Masda President Obet Martin revealed that they had already sent a letter to the Insurance Commission in 2024, requesting an increase in CTPL benefits. Meanwhile, Senator Raffy Tulfo has proposed including property damage in CTPL coverage, which would provide even broader protection for accident victims.

Recent Developments: Sterling Insurance Steps Up

Amid the growing calls for reform, Sterling Insurance recently released a ₱200,000 payment to the owner of the truck involved in the Katipunan accident. Hermano Oil Manufacturing and Sugar Corporation, which owns the truck, has also pledged to provide additional financial assistance to the victims.

While this is a step in the right direction, it further highlights the need for systemic change—where accident victims automatically receive financial help without long delays and complex claims processes.

A Turning Point for Road Safety and Insurance

LTO’s push to revamp CTPL insurance marks a crucial shift in how road accidents are handled in the Philippines. If successful, these reforms could transform CTPL from a mere legal requirement into an effective safety net that truly protects motorists and accident victims.

With rising accident cases on Philippine roads, ensuring immediate and fair insurance payouts could save lives, ease the burden on victims, and restore public trust in the insurance system.

The question now is: Will insurance companies and lawmakers move fast enough to make these much-needed changes a reality?

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