Insurance cases

Blucross vs NEOMI
Facts:

Respondent Neomi T. Olivares applied for a health care program with petitioner Blue Cross Health Care, Inc., a health
maintenance firm. The application was approved on October 22, 2002. In the health care agreement, ailments due to
"pre-existing conditions" were excluded from the coverage. espondent Neomi suffered a stroke and was admitted at the
Medical City which was one of the hospitals accredited by petitioner. During her confinement, she underwent several
laboratory tests. he was discharged from the hospital on December 3, 2002. On December 5, 2002, she demanded that
petitioner pay her medical bill. When petitioner still refused, she and her husband, respondent Danilo Olivares, were
constrained to settle the bill. the RTC, in a decision dated February 2, 2004, reversed the ruling of the MeTC and ordered
petitioner to pay respondents. Aggrieved, petitioner filed a petition for review under Rule 42 of the Rules of Court in the
CA.

Issue:

(1) whether petitioner was able to prove that respondent Neomi's stroke was caused by a pre-existing condition
and therefore was excluded from the coverage of the health care agreemen

Ruling:

Respondents counter that the burden was on petitioner to prove that Neomi's stroke was excluded from the coverage of
their agreement because it was due to a pre-existing condition. In Philamcare Health Systems, Inc. v. CA,19 we ruled that
a health care agreement is in the nature of a non-life insurance.20 It is an established rule in insurance contracts that
when their terms contain limitations on liability, they should be construed strictly against the insurer. These are
contracts of adhesion the terms of which must be interpreted and enforced stringently against the insurer which
prepared the contract. This doctrine is equally applicable to health care agreements.

Fotune vs CA
Facts:

This case began with the filing with the Regional Trial Court (RTC) of Makati, Metro Manila, by private respondent
Producers Bank of the Philippines (hereinafter Producers) against petitioner Fortune Insurance and Surety Co., Inc.
(hereinafter Fortune) of a complaint for recovery of the sum of P725,000.00 under the policy issued by Fortune. The sum
was allegedly lost during a robbery of Producer's armored vehicle while it was in transit to transfer the money from its
Pasay City Branch to its head office in Makati.

An armored car of the plaintiff, while in the process of transferring cash in the sum of P725,000.00 under the custody of
its teller, Maribeth Alampay, from its Pasay Branch to its Head Office at 8737 Paseo de Roxas, Makati, Metro Manila on
June 29, 1987, was robbed of the said cash. The robbery took place while the armored car was traveling along Taft
Avenue in Pasay City.

Fortune thus contends that Magalong and Atiga were employees of Producers, following the ruling in International
Timber Corp. vs. NLRC 7 that a finding that a contractor is a "labor-only" contractor is equivalent to a finding that there is
an employer-employee relationship between the owner of the project and the employees of the "labor-only" contractor.

Issue:
WON the petitioner is entitled to recover the amount of money from the insured aprty.

Ruing:

It should be noted that the insurance policy entered into by the parties is a theft or robbery insurance policy which is a
form of casualty insurance. Section 174 of the Insurance Code provides:

Sec. 174. Casualty insurance is insurance covering loss or liability arising from accident or mishap, excluding certain types
of loss which by law or custom are considered as falling exclusively within the scope of insurance such as fire or marine.
It includes, but is not limited to, employer's liability insurance, public liability insurance, motor vehicle liability insurance,
plate glass insurance, burglary and theft insurance, personal accident and health insurance as written by non-life
insurance companies, and other substantially similar kinds of insurance. (emphases supplied)

An insurance contract is a contract of indemnity upon the terms and conditions specified therein. 19 It is settled that the
terms of the policy constitute the measure of the insurer's liability. 20 In the absence of statutory prohibition to the
contrary, insurance companies have the same rights as individuals to limit their liability and to impose whatever
conditions they deem best upon their obligations not inconsistent with public policy.

Golf resort vs PCIC

FACTS:

Gulf Resorts, Inc at Agoo, La Union was insured with American Home Assurance Company which includes loss or damage
to shock to any of the property insured by this Policy occasioned by or through or in consequence of earthquake

In consideration of the payment by the insured to the company of the sum included additional premium the Company
agrees, notwithstanding what is stated in the printed conditions of this policy due to the contrary, that this insurance
covers loss or damage to shock to any of the property insured by this Policy occasioned by or through or in consequence
of earthquake

July 16, 1990: an earthquake struck Central Luzon and Northern Luzon so the properties and 2 swimming pools in its
Agoo Playa Resort were damaged

August 23, 1990: Gulf's claim was denied on the ground that its insurance policy only afforded earthquake shock
coverage to the two swimming pools of the resort

Petitioner contends that pursuant to this rider, no qualifications were placed on the scope of the earthquake shock
coverage. Thus, the policy extended earthquake shock coverage to all of the insured properties.

RTC: Favored American Home - endorsement rider means that only the two swimming pools were insured against
earthquake shock

CA: affirmed RTC

ISSUE: W/N Gulf can claim for its properties aside from the 2 swimming pools

Ruling:

There is no ambiguity in the terms of the contract and its riders. Petitioner cannot rely on the general rule that insurance
contracts are contracts of adhesion which should be liberally construed in favor of the insured and strictly against the
insurer company which usually prepares it.31 A contract of adhesion is one wherein a party, usually a corporation,
prepares the stipulations in the contract, while the other party merely affixes his signature or his "adhesion" thereto.
Through the years, the courts have held that in these type of contracts, the parties do not bargain on equal footing, the
weaker party's participation being reduced to the alternative to take it or leave it. Thus, these contracts are viewed as
traps for the weaker party whom the courts of justice must protect.32 Consequently, any ambiguity therein is resolved
against the insurer, or construed liberally in favor of the insured.

We cannot apply the general rule on contracts of adhesion to the case at bar. Petitioner cannot claim it did not know the
provisions of the policy. From the inception of the policy, petitioner had required the respondent to copy verbatim the
provisions and terms of its latest insurance policy from AHAC-AIU.

Eternal Gardens vs Philam life

Facts:

Respondent Philamlife entered into an agreement denominated as Creditor Group Life Policy with petitioner. Under the
policy, the clients of Eternal who purchased burial lots from it on installment basis would be insured by Philamlife.
Among those insured was John Chuang who died with a balance of payments pf PhP100,000.00. More than a year after
complying with the required documents, Philamlife had not furnished Eternal with any reply to the latter’s insurance
claim. This prompted Eternal to demand from Philamlife the payment of the claim for PhP 100,000 on April 25, 1986.
Only then did Philamlife respond that the deceased was not covered by the Policy.

The RTC said that since the contract is a group life insurance, once proof of death is submitted, payment must follow.
The CA ruled that the non-accomplishment of the submitted application form violated Section 26 of the Insurance Code.
Thus, the CA concluded, there being no application form, Chuang was not covered by Philamlifes insurance.

WON petitioner is entitled for claim of proceed.

Yees.

Clearly, the vague contractual provision, in Creditor Group Life Policy No. P-1920 dated December 10, 1980, must be
construed in favor of the insured and in favor of the effectivity of the insurance contract.

Indemnity and liability insurance policies are construed in accordance with the general rule of resolving any ambiguity
therein in favor of the insured, where the contract or policy is prepared by the insurer. A contract of insurance, being a
contract of adhesion, par excellence, any ambiguity therein should be resolved against the insurer; in other words, it
should be construed liberally in favor of the insured and strictly against the insurer. Limitations of liability should be
regarded with extreme jealousy and must be construed in such a way as to preclude the insurer from noncompliance
with its obligations.

Manila bankers vs Aban

Facts: On July 3, 1993, Delia Sotero (Sotero) took out a life insurance policy from Manila Bankers Life Insurance
Corporation (Bankers Life), designating respondent Cresencia P. Aban (Aban), her niece, as her beneficiary. Petitioner
issued Insurance Policy No. 747411 (the policy), with a face value of P 100,000.00, in Sotero’s favor on August 30, 1993,
after the requisite medical examination and payment of the insurance premium. On April 10, 1996, when the insurance
policy had been in force for more than two years and seven months, Sotero died. Respondent filed a claim for the
insurance proceeds on July 9, 1996. Petitioner conducted an investigation into the claim, and came out with the
following findings: 1. Sotero did not personally apply for insurance coverage, as she was illiterate; 2. Sotero was sickly
since 1990; 3. Sotero did not have the financial capability to pay the insurance premiums on Insurance Policy No.
747411; 4. Sotero did not sign the July 3, 1993 application for insurance; and 5. Respondent was the one who filed the
insurance application, and x x x designated herself as the beneficiary. For the above reasons, petitioner denied
respondent’s claim on April 16, 1997 and refunded the premiums paid on the policy.

Issue: Whether or not Manila Bankers is barred from denying the insurance claims based on fraud or concealment.

Held: Yes. The “incontestability clause” is a provision in law that after a policy of life insurance made payable on the
death of the insured shall have been in force during the lifetime of the insured for a period of two (2) years from the
date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is rescindible by
reason of fraudulent concealment or misrepresentation of the insured or his agent.

The purpose of the law is to give protection to the insured or his beneficiary by limiting the rescinding of the contract of
insurance on the ground of fraudulent concealment or misrepresentation to a period of only two (2) years from the
issuance of the policy or its last reinstatement.

The insurer is deemed to have the necessary facilities to discover such fraudulent concealment or misrepresentation
within a period of two (2) years. It is not fair for the insurer to collect the premiums as long as the insured is still alive,
only to raise the issue of fraudulent concealment or misrepresentation when the insured dies in order to defeat the right
of the beneficiary to recover under the policy.