Republic of the Philippines

Hovusk Or Repassenratives
Quezon City, Metro Manila

Fifteenth Congress
Second Regular Sess

HOUSE BILL NO.__5066
Introduced by Honorable Carlos M, Padilla

EXPLANATORY NOTE

Under the insurance Code, any land transportation operator or owner of a
motor vehicle is required to secure a Compulsory Motor Vehicle I
Insurance (CMVLA) or guaranty in cash or surety bond in order tw register or
renew the registration of the motor vehicle. The insurance is intended w
indemnify for the death or bodily injury of the third party or passenger in case
of accident arising from the use of the motor vehicle

Since the insurance mandated by the Insurance Code is limited only to
third party liability, many vehicle owners opt to get a comprehensive insurance
coverage in order to include in the coverage the damage on the vehicle.
However, under the comprehensive insurance, the owner of the mator vehicle iy
required to pay a participation fee as a share of the owner of the insured ychicle
in the cost of the repair or replacement of parts of the damaged vehicle to be
computed based on the rate of depreciation and age of the vehicle. “The practice
of insurance companies in making the owner of the motor vehicle pay the
participation fee should be put to an end.

Under the proposed bill, ihe payment of participation tees tor the
replacement of accessories and parts or repair of the vehicle will no longer be
required especially if the damage sustained by the vehicle was caused by
another vehicle. It is unfair on the part of the owner of the motor vehicle to pay
partivipation fee for the repair of the motor vehicle when in fact the damage was
a result of an accident not of his own doing. Any claim for damage sustained
by a motor vehicle covered by comprehensive insurance will be against its
insurer without prejudice to the right of the party paying the claim to recover
against the owner or insurer of the motor vehicle responsible for the accident

In view of the foregoing, approval of this bill is highly recommended.

RLOS M. PADILLA

CAAA
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Republic of the Philippines
House Or Representatives
Quezon City, Metro Manila

Fifteenth Congress
Second Regular Session

HOUSE Bi. No,__ 5065

Introduced by Honorable Carlos M. Padilla

AN ACT

DISALLOWING THE PAYMENT OF PARTICIPATION FEES IN
COMPREHENSIVE INSURANCE COVERAGF, AMENDING FOR THE
PURPOSE PRESIDENTIAL DECREE NO. 612, OTHERW! KNOWN
AS THE “PHILIPPINE INSURANCE CODE”

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress Assembled:

SECTION 1. Section 378 of Presidential Decree No. 612 is amended w
read as follows:
“SEC. 378. Any claim for death or injury to any passenger
or third party pursuant to the provisions of this Chapter shall be
paid without the necessity of proving fault or negligence of any

kind: Provided, That for purposes of this section —

@ x x x
Gy x x x
(iii) x x x

IN CASE OF ANY DAMAGE SUSTAINED BY A

MOTOR VEHICLE COVERED BY COMPREHENSIVE


INSURANCE, THE CLAIM SHALL LIE AGAINST ‘THE
INSURER OF THE VEHICLE WITHOUT PREJUDICE TO THE
RIGHT OF THE PARTY PAYING THE CLAIM TO RECOVER
AGAINST THE OWNER OR INSURER OF THE MOTOR
VEHICLE RESPONSIBLE FOR THE ACCIDENT.

THE COMPREHENSIVE INSURANCE SHALL NOT
REQUIRE THE OWNER OF THE DAMAGED VEHICLE TO
PAY ANY PARTICIPATION FEE FOR THE COST OF THE
REPAIR OR THE REPLACEMENT OF PARTS THEREOF:
PROVIDED, THAT THE DAMAGE SUSTAINED WAS NOT
DUE TO THE FAULT OR NEGLIGENCE OF THE OWNER OR
AUTHORIZED DRIVER OF THE DAMAGED MOTOR
VEHICLE.”

SEC. 2. This Act shall take effect fifteen (15) days afler its publication in
the Official Gazette or in two (2) national newspapers of general circulation.

Approved,