In short
The bank requires that, plus a renewal every year until the loan is paid. If the car is stolen or written off, insurers ask for the bank's statement of your outstanding balance before they settle.
CTPL stays your own job: ₱560 a year for a private car under IC Memorandum Circular 4-2006 (official source), bought when you renew the registration.
- Where the bank goes
- Mortgagee box on the IC standard policy schedule (from 1 July 2023)
- Who requires it
- Your lender's loan contract, not the Insurance Code
- Renewal
- Every year until the loan is paid
- Theft or total loss claim
- Bank's statement of outstanding loan balance
- After the loan
- Release of chattel mortgage, kept with the OR/CR
- CTPL
- ₱560 a year (IC Memorandum Circular 4-2006, since 1 January 2007), separate from the bank's requirement
What the mortgagee clause on your policy does
The IC standard Private Car Policy has a box on its schedule labelled Mortgagee. On a financed car, the insurer writes your bank's name there.
It records that the bank holds a chattel mortgage over the car.
Quote forms ask about it up front. Standard's online form asks whether the car is mortgaged and to which bank, and FPG Mercantile and Pacific Union ask the same.
What each bank requires, from acts of nature to its list of accepted insurers, is set out in car loan insurance requirements. The bank terms below are as each bank states them in October 2026.
- BPI
- Your own policy must name BPI as mortgagee
- Maybank
- Policy names Maybank as creditor and mortgagee, for the car's full insurable value
- UnionBank
- Loss payable clause acceptable to the bank; cover not less than the outstanding loan
- Standard Insurance quote form
- Asks if the car is mortgaged, then the bank
- FPG Mercantile and Pacific Union forms
- Ask if the unit is mortgaged or financed
How much to insure a financed car for
The schedule's estimate of value is the most the insurer pays. Your bank sets a floor on it.
UnionBank wants cover of at least the outstanding loan, while Maybank wants the car's full insurable value.
For example, take a car worth ₱1,200,000 with ₱800,000 still owed. UnionBank's floor is ₱800,000, but insuring for only that leaves ₱400,000 of the car's value unpaid in a total loss.
Choose market value if you want a total loss to repay your share too; otherwise the bank's floor is the lowest figure the loan allows. Run both figures through the premium calculator to see the difference in premium.
Claiming on a car that is still under loan
Repairs after a collision run as on any policy. The bank enters the file when the car is stolen or written off.
Insurers then ask for proof of what you still owe, and for theft, the papers that show who holds the title.
The documents differ slightly by insurer. Malayan and Standard list theirs below, and the full claim process is in how to file a car insurance claim.
| Document | Standard Insurance | Malayan |
|---|---|---|
| Bank's statement or certificate of outstanding loan | Total loss and carnap, if mortgaged | Carnap |
| Original release of chattel mortgage | – | Carnap, if any |
| Deed of sale | – | Carnap |
| Sales invoice and delivery receipt | Total loss and carnap | – |
| Original and duplicate keys | Total loss and carnap | Carnap |
| Original OR/CR | Total loss and carnap | Carnap |
Renewing the policy every year of the loan
Banks require cover for the whole loan term, so each policy year ends with a renewal the bank checks. Miss it and two things follow under the banks' own terms.
UnionBank and Maybank may buy a policy for you and add the cost to the loan. Metrobank charges ₱3,000 for late renewal papers, per its car loan FAQ in October 2026.
- Before step 1
- Your current schedule, the bank's insurance requirements and the car's value this year
- Done when
- The bank confirms it received the renewal policy and receipt
- Start before expiry
UnionBank wants the renewal policy at least 30 days before the old one expires. Metrobank's ₱3,000 fee applies past 30 days from the policy anniversary.
- Keep the bank on the schedule
Ask for a renewal quote with the same Mortgagee entry and the covers your bank requires.
- Reset the sum insured
Use the car's value this year, not last year's figure, within your bank's floor.
- Pay and send proof
Send the bank the policy and proof of payment.
- Renewal policy
- Official receipt
- Renew CTPL with the registration
Buy CTPL when you renew the LTO registration. The bank's requirement does not include it.
When the loan is paid off
The bank issues a release of chattel mortgage once you settle the loan. Keep the original with your OR/CR, because Malayan asks for it on a theft claim.
The chattel mortgage guide covers how the release is registered. From then on, the choice of insurer and covers is yours alone, and the switching guide explains changing insurers at renewal.
This guide does not cover loan restructuring or repossession; ask your bank about those. For a dispute with the insurer, the Insurance Commission's Public Assistance and Mediation Division mediates without a fee.