MOTOR VEHICLE – any vehicle propelled by any power other than muscular power using the public

highways but exceptng road rollers, trolley cars, street sweepers, sprinklers, lawn mowers, bulldozers,
graders, forklifts, amphibian trucks, and cranes if not used in public highways, vehicles which run only
on rails or tracks, and tractors, trailers and tractioin engines of all kinds used exclusively for agrcultural
purposes (Sec. 3, RA 4136 - Land Transportation and Traffic Code )

MOTOR VEHICLE LIABILITY INSURANCE (CMVLI) – protection coverage that will answer for
legal liabilty for losses and damages for bodily injuries or property damage that may be sustained by
another arising from the use and operation of a motor vehicle
– it is obtained purely on voluntary basis by the vehicle owner; at present, it is on a compulsory
basis
– enjoining LTO or a motor vehicle owner (MVO) not to operate vehicle in public highways
unless there is a policy of insurance
– it can be in form of guranty in cash or surety bond

Purpose:
- to assure victims of motor vehicle accidents especially when they are poor
– immediate financial assistance or indemnity regardless of the financial capabilityof motor
vehicle owners or operators
– insurer's liability is primary and accrues immediately upon the occurrence of injury
– the primary purpose is to afford protection to third persons who are not parties to the
contract

*liabity in damage to property deleted (P.D. 1814)

PERSONS INVOLVED:
*Motor Vehicle Owner (MVO) – the actual legal owner of a motor vehicle and registred with LTO
• Land Transportation Operator (LTO) – owner of a motor vehicle/s being used for conveying
passengers for compensation including school buses

SUBSTITUES FOR CMVLI policy:

a) posting surety bond with the Insurance Commissioner; or
b) depositing cash with the Insurance Commissioner

SCOPE OF COVERAGE
a) for MVOs – comprehensive against third party liability; if used for transporation, include
passenger liabilty
b) for LTOs – comprehensive against both passenger and third party liabilites

*Sec. 390 of IC prescribes the minimum limits of liability for different kinds of private motor and
public utility vehicles

CANCELLATION of cover
-give notice to insurance or surety company, secure another one or deposit cash to IC
-if cancelled, plates of the motor vehicle shall be confiscated, unless it receives any of the following:
a) an evidence or proof of a new and valid CMVLI cover;
b) a sigmed duplicate of an endorsement or addendum issued by the insurance company
showing revival or continuance of the CMVLI cover; or
c) a certification issued by the IC to the effect that a cash deposit in the amount required as limit
of indemnity hs been made with him by the MVO or LTO.