Insurance to Test Drive a Car?

by Ronel Forbes

December 9, 2021

Is it necessary to have insurance to test drive a car?

Taking a new automobile for a test drive at the dealership is a great way to see if it meets your needs. It not only gives you peace of mind that there are no major problems, but it also allows dealers to display the vehicle’s features and capabilities. But, do you need insurance to take a car for a test drive?

All motor vehicles must be insured with the Compulsory Third-Party Liability coverage in order to drive on Philippine highways. All cars, whether personal, commercial, or test-drive, must be insured against third-party liabilities.

Driving an uninsured vehicle can result in fines and possibly imprisonment.

Before you take a test drive, make sure you check with the dealership regarding the validity of the test drive car’s insurance. The Comprehensive Car Insurance package provides unquestionably superior protection for a car.

It includes coverage for both third-party liability and damages to the covered vehicle. Make sure the car you’re going to test drive is fully insured.

Dealers typically purchase a policy that covers damages to the insured vehicle as well as liability claims made while a customer or employee is driving the vehicle.

It’s a good idea to double-check that the test drive car is covered by motor car insurance before getting behind the wheel. Ask if the vehicle is insured and if you are responsible for any damages or losses that may occur as a result of an accident when test driving an automobile from a dealership.

To minimize unforeseen obligations, it is best to test drive an automobile only if it has an active insurance plan.

Is it possible to test drive a used car without having insurance?

All cars, including used cars, should be insured, whether they are new or used. The used car should be covered by the required Third-Party Liability insurance (TP). Taking a second-hand car for a test drive without insurance could result in serious traffic violations.

Because auto insurance policies vary, it’s usually a good idea to ask about the precise coverage of the used car you’re going to test drive. Check to see if the secondhand car has the following coverage.

Third-party liability coverage: In the event of an accident while test-driving a car, third-party liability coverage covers for injuries or property damage to a third party.

Own damage coverage (OD) covers the cost of repairing or replacing damaged pieces of a used car if it is damaged in an accident while being tested. It also covers losses or damages caused by natural disasters, man-made disasters, and even theft.

Which auto insurance policies cover a test drive vehicle?

You are usually covered by the vehicle dealer’s auto insurance if you want to test drive a new car from them. The test drive car should be insured by the dealer selling the new car.

Typically, the test drive vehicle’s insurance should include necessary third-party coverage. However, for comprehensive coverage, the test drive car should be insured with Comprehensive insurance. It covers third-party liabilities as well as vehicle damage.

What documentation is required for a car test drive?

A valid driver’s license is the only condition for test driving a new or used car (DL). However, the vehicle you are testing should be fully insured so that you are protected in the event of an accident or liabilities stemming from third-party injury or property damage.

Is evidence of insurance required to test drive a car, even though the driver’s license is required? To test drive an automobile, you do not need car insurance. The dealer is usually responsible for the test drive car’s insurance.

When scheduling your test drive, double-check that the vehicle is covered by valid insurance for use on Indian roads.

Things to keep in mind

Dealerships must insure their test drive vehicles to ensure that they are legal to drive on public roads.
When a dealer sells an automobile, he or she is no longer responsible for insuring it.
The dealership has both third-party liability and own damage insurance, which covers damage to the test vehicle as well as third-party liabilities that may occur during a test drive.

Unexpected Happens

Is it possible for the dealer to hold me accountable for damages?

All of this is to say that just because you’re insured by a dealership’s insurance doesn’t guarantee you’ll always be free of liability. The dealer may hold you liable for damages depending on the cause of the accident (for example, reckless driving).

While the dealership may initially pay for the repairs, if you cause an accident during the test drive, they may subrogate and seek payment from you or your insurance agency.

What should you do if you suffer an accident while on a test drive?

You may need to file an insurance claim if you suffer an accident while test driving a car.

Because all automobile accidents are logged in something called the Claims and Underwriting Exchange, you’ll also need to notify your insurer (CUE).

It encompasses any instances in which:

You were a well-known driver.
It wasn’t your fault in the first place.
You didn’t make any claims.
You were in a different type of vehicle, such as a van or a motorcycle.

What if I sign a waiver?

Before handing over the keys for a test drive, some dealerships will want you to sign a “loaner/demo” agreement. This typically occurs when you’ll be driving for an extended period of time or when the salesperson isn’t present throughout the test drive.

By signing the waiver, you acknowledge that you assume responsibility for the cost of repairs if you damage the car during the test drive.

Of course, double-check with your agent to ensure that your personal auto insurance policy would cover you in such a situation.

Bottomline:

Every vehicle on the road in the Philippines is required to obtain automobile insurance, particularly third-party coverage. Driving a vehicle without valid insurance might result in serious penalties under current rules.

Furthermore, automobile insurance is vital not only because it is required by law, but it also provides you with the security and peace of mind that you will be compensated if your vehicle is involved in an accident or suffers damage of any type.

Vehicle insurance, particularly third-party auto insurance, is required to ensure that you are driving safely in the Philippines. The Motor Vehicles Act made third-party insurance required for this reason.

Third-party insurance is available separately or as part of your car’s comprehensive insurance. However, before purchasing your coverage, make sure to compare auto insurance online quotes.