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NOTICE OF LOSS

General Rule:

Insured noncompliance with the terms and conditions of the policy = Bars the right to recovery

Conditions after Loss

Section 90

In case of loss upon an insurance against fire, an insurer is exonerated, if written notice thereof
be not given to him by an insured, or some person entitled to the benefit of the insurance,
without unnecessary delay. For other non-life insurance, the Commissioner may specify the
period for the submission of the notice of loss. (a)

Section 91

When a preliminary proof of loss is required by a policy, the insured is not bound to give such
proof as would be necessary in a court of justice; but it is sufficient for him to give the best
evidence which he has in his power at the time.

Conditions after Loss

1. Notice of Loss

2. Preliminary proof of Loss

I. Notice of Loss

Purpose: Apprise the insurance company with the occurrence of the loss.

gather information

make proper investigation

protect its interest

Necessity of Notice of Loss

If the notice of loss is not given to the insurer by the person insured without unnecessary delay
or in a timely manner, the insurer is exonerated.

Section 90: In case of loss upon an insurance against fire, an insurer is exonerated ()

Time for giving Notice of Loss

Notice of loss must be given without unnecessary delay which means within reasonable time.

Fire: Immediately
Non-life insurance other than fire: Commissioner may specify the period

Stipulated in the policy: Valid

Excuse for non-compliance

Compliance with the requirement is impossible or unreasonable and the insured has not failed
to use due diligence.

II. Proof of Loss

Definition

The evidence given to the insurer of the occurrence of the loss; the particulars and the data
necessary to enable the insurer to determine its liability, and the amount thereof.

Form

Fire: Written (Section 90)

Other non-life insurance : Written/Oral

Purpose

a. Give the insurer information by which he may determine the extent of his liability

b. Means of detecting fraud

c. Operate as a check upon extravagant claims

Burden of Proof :Insured/Beneficiary

Life Insurance: Death of the insured must be proven

Property insurance: That there is a loss which the policy protects

Waiver of Defects

Section 92 - All defects in a notice of loss, or in preliminary proof thereof, which the insured might
remedy, and which the insurer omits to specify to him, without unnecessary delay, as grounds of
objection, are waived.

1. When the insurer fails to specify to the insured any defect in the notice or proof of loss which the
insured might remedy without unnecessary delay.

2. When the insurer already made partial payment of the loss of the property insured.

3. When the insurer denied liability on a ground other than the defect in the notice or proof of loss
Example:

o Policy required that the proof of loss to be executed before a notary public, instead of complying
the insured just wrote a letter informing the insurance company of the loss. The insurance
company declare the policy null and void.

Question: May the insurer still raise the defect in the proof of loss as a defense?

Answer: No, the denial of liability on other grounds was a waiver of the defect in the proof of loss

Waiver of Delay

Section 93 : Delay in the presentation to an insurer of notice or proof of loss is waived if caused by any
act of him, or if he omits to take objection promptly and specifically upon that ground.

1. Where the delay was caused by an act of the insurer

2. Where the insurer failed to object to the delay promptly and specifically upon such ground.

Certification of Third Person

Section 94 : If the policy requires, by way of preliminary proof of loss, the certificate or testimony of a
person other than the insured, it is sufficient for the insured to use reasonable diligence to procure it,
and in case of the refusal of such person to give it, then to furnish reasonable evidence to the insurer
that such refusal was not induced by any just grounds of disbelief in the facts necessary to be certified or
testified.

Whenever the policy requires by way of preliminary proof of loss, a certification of a third
person, failure to present the same will not necessarily be fatal to the insureds claim.

In case third person from whom the certification is required refuses to certify, the insured will
have to present reasonable evidence.

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