Compulsory Motor Vehicle Liability Insurance (CMVLI)

SEC. 387. It shall be unlawful for any land transportation operator or owner of a motor vehicle to
operate the same in the public highways unless there is in force in relation thereto a policy of
insurance or guaranty in cash or surety bond issued in accordance with the provisions of this
chapter to indemnify the death, bodily injury, and/ or damage to property of a third-party or
passenger, as the case may be, arising from the use thereof.

SEC. 388. The Commissioner shall furnish the Land Transportation Office with a list of
insurance
companies authorized to issue the policy of insurance or surety bond required by this chapter.

SEC. 389. The Land Transportation Office shall not allow the registration or renewal of
registration of any motor vehicle without first requiring from the land transportation operator or
motor vehicle owner concerned the presentation and filing of a substantiating documentation in
a form approved by the Commissioner evidencing that the policy of insurance or guaranty in
cash or surety bond required by this chapter is in effect.

Primarily intended to provide compensation for the death or bodily injuries suffered by innocent
third parties or passengers as a result of the negligent operation and use of motor vehicles.

No fault clause

SEC. 391. 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:
(a) The total indemnity in respect of any person shall not be less than Fifteen thousand pesos
(P15,000.00);
(b) The following proofs of loss, when submitted under oath, shall be sufficient evidence to
substantiate the claim:

● Police report of accident; and

● Death certificate and evidence sufficient to establish the proper payee; or
● Medical report and evidence of medical or hospital disbursement in respect of which
refund is claimed;

(c) Claim may be made against one motor vehicle only. In the case of an occupant of a vehicle,
claim, shall lie against the insurer of the vehicle in which the occupant is riding, mounting or
dismounting from. In any other case, claim shall lie against the insurer of the directly offending
vehicle. In all cases, the right of the party paying the claim to recover against the owner of the
vehicle responsible for the accident shall be maintained.
 ● No fault indemnity provision - proof of fault or negligence is not necessary for payment of
any claim for death or injury to a passenger or a third party;
● For death or bodily injuries sustained by a passenger or third party.

SEC. 395. In case of change of owner ship of a motor vehicle, or change of the engine of an
insured vehicle, there shall be no need of issuing a new policy until the next date of registration
or renewal of registration of such vehicle, and: Provided, That the insurance company shall
agree to continue the policy, such change of ownership or such change of the engine shall be
indicated in a corresponding endorsement by the insurance company concerned, and a signed
duplicate of such endorsement shall, within a reasonable time, be filed with the Land
Transportation Office.

SEC. 396. In the settlement and payment of claims, the indemnity shall not be availed of by any
accident victim or claimant as an instrument of enrichment byreason of an accident, but as an
assistance or restitution insofar as can fairly be ascertained.

SEC. 397. Any person having any claim upon the policy issued pursuant to this chapter shall,
without any unnecessary delay, present to the insurance company concerned a written notice of
claim setting forth the nature, extent and duration of the injuries sustained as certified by a duly
licensed physician. Notice of claim must be filed within six (6) months from the date of accident,
otherwise, the claim shall be deemed waived. Action or suit for recovery of damage due to loss
or injury must be brought, in proper cases, with the Commissioner or the courts within one (1)
year from denial of the claim, otherwise, the claimant's right of action shall prescribe.

Prescriptive period - one (1) year when the cause of action accrues. The period is counted
from the date of rejection by the insurer as this is the time when the cause of action accrues.