Professional Documents
Culture Documents
; 2005
GENERAL PROVISIONS
Sec. 1. Name of Decree: The Insurance Code of CHAPTER 1. THE CONTRACT OF INSURANCE
1978
Title 1. What May Be Insured (Against)
Jack: The question of whether a contract of
insurance is perfected is NOT governed by the Sec. 3. What may be insured (against):
Insurance Code but by the New Civil Code (re: 1.) Any contingent or unknown event, whether
perfection of contracts). past
or future, which may cause damage to a
Sec. 2. Definition of Terms: person having an insurable interest; or
2.) Any contingent or unknown event, whether
1.) Contract of insurance: An agreement past
whereby one undertakes for a consideration or future, which may create a liability
to indemnify another against loss, damage against the person insured.
or liability arising from an unknown or Validity of insurance policy taken out by
contingent event. married women and minors: The consent of the
husband is not necessary for the validity of an
Jack: Suretyship is different from an insurance insurance policy taken out by a married woman on
contract because there are three parties in her life or that of her children.
suretyship and when the surety pays, he is entitled Rights of insured married women and
to reimbursement. In insurance, when the insurer minors: The married woman or the minor herein
pays, he is not entitled to reimbursement. allowed to take out an insurance policy may exercise
all rights and privileges of an owner under a policy.
Underlying concept in insurance: It deals with a All rights, title and interest in the policy of
scheme of distribution of risk/loss. insurance taken out by an original owner on the life
or health of a minor shall automatically vest in the
Elements of insurance contract: minor upon the death of the original owner, unless
1.) Consent of parties otherwise provided for in the policy.
a.) Insurer
b.) Insured Sec. 4. Section 3 does not authorize an
2.) Object: Transfer or distribute risk of loss, insurance for or against the drawing of any
damage, liability or disability from insured to lottery, or for or against any chance or ticket
insurer in a lottery drawing a prize.
3.) Cause/consideration: Premiums
4.) INSURABLE INTEREST: Insured possesses an Jack: What is prohibited is not only a chance in
interest of some kind susceptible of lottery but all forms of gambling and wagering.
pecuniary estimation.
Sec. 25: A policy contract executed by way of
Elements of insurance contract: (according to Jack) gambling or wagering is void.
[IRASP]
1.) Insurable interest; Sec. 5. Applicability of Chapter 1 provisions to
2.) Risk of loss; all kinds of insurance: All kinds of insurance are
3.) Assumption of risk; subject to the provisions of this chapter so far as the
4.) Scheme to distribute losses; provisions can apply.
5.) Payment of premiums.
Jack: Section 8 speaks of a mortgage clause in an Jack: When you insure the life of another, the
insurance contract. This is common in car insurance. consent of that person must be obtained and there
It may be provided therein that in case of loss, the must also be insurable interest over the life of that
proceeds will be paid to the mortgagee. But it is still person.
the mortgagorwho is the insured so he is the only
one who can sue thereon. Sec. 11. Insured has right to change beneficiary
Under the Civil Code, when the insurer pays, he is unless waived
subrogated to the rights of the insured against the
wrongdoer. Jack: Remember that if the designation of the
beneficiary is irrevocable, change of beneficiary can
Sec. 9. When transfer of insurance is made from only be made with the consent of the said
mortgagor to mortgagee w/ assent of insurer w/ beneficiary.
imposition of additional obligations on assignee,
the mortgagor’s acts do not affect assignee’s Sec. 12. Interest of beneficiary in a life insurance
rights. policy forfeited if beneficiary a principal,
accomplice or accessory in death of insured;
This is an exception to the rule that all acts of the nearest relative of insured to receive proceeds if not
m’or affects the m’ee: when further obligations disqualified.
imposed on the m’ee.
Sec. 13. Insurable interest in property is that
w/c is of such nature that a contemplated peril
Title 3. Insurable Interest will damnify an insured
Sec. 10. Insurable interest in life and health: Jack: Interest in property has the classic example,
Every person has an insurable interest in the life and that is the ownership or any relation there to the
health of: trustee or liability, like the third party’s liability
1.) Himself, of his spouse and of his children; insurance for motor vehicle, so there’s an insurable
2.) Any person on whom he depends wholly or in interest.
part An insurable interest in property may consist of
for education or support, or in whom he has an existing interest. Again the classic example is
a pecuniary interest; ownership with interest found in an existing interest,
3.) Any person under a legal obligation to him like stockholders can insure the properties of the
for corporation because they have an existing interest
the payment of money, or respecting property as stockholders, and in quo with interest because in
or services, of w/c death or illness might delay case of dissolution of the corporation the assets will
or prevent the performance; and be distributed among the stockholders by way of
4.) Any person upon whose life any estate or liquidating dividends.
interest vested in him depends.
This is common. A foreign corporation sets up a
domestic subsidiary and usually there is one
Insurable interest: Person deemed to have insurable
insurance company abroad with which they insure
interest in subject matter where he has a relation or
the assets of their subsidiary here. They can do
connection with or concern in it that he will derive
that, an expectancy coupled with an existing interest
pecuniary benefit or advantage from its preservation
in that out of which expectancy arise; in the same
and will suffer pecuniary loss or damage from its
way as farmers can insure their future crops.
destruction, termination, or injury by the happening
of the event insured against.
Sec. 29. Failure to communicate information Principal question to ask: Was the insurer misled or
proving or intending to prove the falsity of a deceived into entering a contract obligation or in
warranty entitles insurer to rescind – Here the fixing the premium of insurance by the withholding
concealment must be intentional or fraudulent to of material information or facts w/in the insured’s
warrant rescission. knowledge or presumed knowledge? If so, then the
contract is avoided, even if the cause of the loss w/c
Sec. 30. Matters w/c each party to insurance subsequently occurred be unconnected w/ the fact
contract is not bound to communicate: concealed.
1.) Those w/c the other knows;
2.) Those w/c, in the exercise of ordinary care, Jack: The failure to disclose an ailment which is
the merely temporary and light is not material. That will
other ought to know, and of which the not be concealment - like the failure to disclose that
former has no reason to suppose him the applicant for a life insurance has cough or sore
ignorant; throat, or say when he was in high school he was
3.) Those of w/c the other waives playing basketball he broke his leg, or the failure to
communication; disclose that when he gets drunk he has stomach
discomforts. That’s minor and need not be
5.) Those which prove or tend to prove the disclosed. Then the party may conceal and makes no
existence of a risk excluded by the
warranty. Why? If he makes a warranty, the defense
warranty, and w/c are not otherwise
of the insurance company will be breach of warranty
material; and
not concealment. The insurance company will still
6.) Those w/c relate to a risk excepted from escape liability but on the ground of breach of
the policy and w/c are not otherwise warranty.
material.
Exception: when the other inquires Sun Life v. CA: Even if the loss was not due to a
fact concealed, the insurance company is not liable -
Insular Life v. Feliciano: Falsified answers due to like somebody who applied for a life insurance
collusion between the insured and the policy. He did not disclose he had kidney ailment
insurance agent and medical examiner. and he died in a plane crash. The insurance
Insurance company absolved from liability. company is not liable although the death was not
due to kidney ailment. The fact remains that the
Jack: If the insurance agent fills up the application insurance company was misled into issuing a policy
for the insured and then the applicant signs it, he it would not otherwise have issued because that risk
will bound if there’s any concealment because by was not acceptable.
allowing the agent to fill up for him, he makes the
agent of the insurance company his own agent for Sec. 32. Each party bound to know:
purposes of filling out the insurance application. 1.) General causes w/c…
Sec. 33. Right to information of material facts Representations are construed liberally in favor of
may be waived by: the insured.
1.) Terms of insurance (expressly); or
2.) Neglect to make inquiries where they are Sec. 39. Representation as to the future
directly implied in other facts already deemed a promise unless merely a statement
communicated (impliedly). of belief or expectation
Sec. 34. Nature or amount of interest need not Sec. 40. Representation cannot qualify express
be communicated. provision of contract, but may qualify an
implied warranty
Exceptions:
1.) In answer to an inquiry; or Sec. 41. Representation may be altered or
2.) When he is not the absolute owner (Sec. 51: withdrawn before insurance is effected, but
items that not afterwards
must be included in an insurance policy: (e)
Interest of insured in property insured, if he is Sec. 42. Representation refers to date of
not the absolute owner thereof.) effectivity of contract
Sec. 35. Opinion or judgment of a party to a There is no false representation if the representation
contract not required to be communicated was true at the time the contract takes effect altho’
it was false at the time it was made. But there is
Sec. 108 (marine insurance): Info of the belief or false representation is although/ true at the time it
expectation of a 3rd person w/ respect to material was made, it subsequently becomes false at the
facts is material. time the contract took effect.
Sec. 53. Insurance proceeds; to whom payable: Sec. 61. What a valued policy is: One w/c
The person in whose name or for whose benefit expresses on its face an agreement that the thing
the policy was made. insured shall be valued at a specified sum.
Cancellation: The right to rescind, abandon or cancel Implied warranty: Warranty w/c from the very nature
a contract of insurance. of the contract or from the general tenor of the
words, altho’ no express warranty is mentioned, is
Non-payment of premium: refers to premiums necessarily embodied in the policy as part thereof
subsequent to the first premium because the law and w/c binds the insured as tho’ expressed in the
speaks of non-payment after the effective date of contract.
the policy. Remember, if you do not pay the 1st
policy, no policy is valid and binding. Therefore, the Affirmative warranty: One w/c asserts the existence
1st premium is the condition precedent to the of a fact or condition at the time it is made.
effectivity of the insurance. So any premium after
the effective date of the policy must refer to the Promissory warranty: One where the insured
premiums after the 1st one has been paid. stipulates that certain facts or conditions pertaining
to the risk shall exist or that certain things w/
Sec. 65. Conditions for cancellation (by reference thereto shall be done or omitted. It is the
insurer) of policy (other than life): nature of a condition subsequent.
1.) There must be prior notice of cancellation to
the Sec. 68. A warranty may relate to the past,
insured; present or to the future, or any or all of them
2.) The notice must be based on the occurrence,
after the effective date of the policy, of one or Sec. 69. No particular form of words necessary
more of the grounds mentioned in Sec. 64; to create a warranty
3.) The notice must be in writing, mailed or
delivered to the insured at the address When insured stipulates something in the policy or
shown in the policy; even in the application form, it is not always a
4.) It must state which of the grounds set warranty. It depends on his intention. Sometimes a
forth in statement made by the insured is not meant to be a
Sec. 64 is relied upon; and warranty but a representation. In case of doubt, such
5.) If so requested by the insured, it is the statement is only considered a representation.
duty
of the insurer to furnish the facts on which Difference between a warranty and a representation:
the cancellation is based. Warranties Representations
Considered parts of the Collateral inducements to
Saura v. Phil International Co.: Notice of contract. the contract.
cancellation by insurer to m’ee alone is not effective Always written on the May be written in a
as to m’or/ owner. There must be actual and face of the policy, totally disconnected
personal notice. actually or by reference. paper, or may even be
oral.
Malayan Insurance v. Arnaldo: Notice was not Must be strictly Substantial truth only
effectively made. No proof was presented that the complied w/. required.
notice was actually mailed to and received. A valid Falsity/non-fulfillment Falsity renders policy
cancellation requires: operates as a breach of void on the ground of
1.) Prior notice to insured; contract. fraud.
2.) Notice must be based on grounds mentioned; Presumed material. Insurer must show the
3.) Must be in writing, mailed or delivered to the materiality in order to
insured; defeat axn on policy.
4.) Must state ground for cancellation.
Sec. 70. An express warranty must be in the
Sec. 66. In non-life insurance, insured is policy itself or in another document signed by
entitled to renew contract by payment of the insured and made part of the policy
premium unless notified by insurer 45 days
prior to expiry date Ang Giok Chip v. Springfield Fire & Marine Ins.:
It is well settled that a rider attached to a policy is a
part of the contract, to the same extent and with like
Title 7. Warranties effect as if actually embodied therein. In the second
place, an express warranty must appear upon the
Sec. 67. A warranty is express or implied face of the policy, or be clearly incorporated therein
and made a part thereof by explicit reference, or by
Warranty: A statement or promise set forth in the words clearly evidencing such intention.
policy itself or incorporated in it by proper reference,
the untruth or non-fulfillment of w/c in any respect Sec. 71. Express warranty: A statement in the
and w/o reference to whether the insurer was in fact policy relating to the person or thing insured, or
prejudiced by such untruth or non-fulfillment, to the risk as a fact
renders the policy voidable by the insurer.
Sec. 72. Promissory warranty: to do or not to
Different kinds of warranty: do a thing that materially affects the risk
1.) Affirmative (Sec. 68);
2.) Promissory (Sec. 72);
Sec. 73. Breach of warranty; effect: Avoids Difference between a premium and an assessment:
contract of insurance. Premium Assessment
Exceptions: Levied and paid to meet Collected to meet actual
1.) When loss occurs before time for anticipated losses. losses.
performance; Payment of premium, Legally enforceable once
2.) When performance becomes unlawful; after the 1st, is not levied.
3.) When performance becomes impossible. enforceable against the
insured.
Sec. 74. Violation of a material warranty or Not a debt. Is a debt (if properly
other material provision by either parties levied).
entitles other party to rescind
Effect of non-payment of premiums:
Young v. Midland Textile Ins.: Even if (storage of
1.) Non-payment of the 1st premium unless waived
firecrackers) not cause of the event insured against
prevents the contract from becoming binding
(fire), violation of warranty terminates the contract.
notwithstanding the acceptance of the application
Compliance with terms of contract is condition
nor the issuance of the policy. But non-payment of
precedent to right of recovery.
the balance of the premium due does not produce
the cancellation of the contract.
Exception: Merely incidental to the business.
2.) Non-payment of subsequent premiums does
not affect the validity of the contracts unless by
Jack: there may also be waiver. If the insurance co.
express stipulation, it is provided that the policy in
was aware that there was a breach of warranty but
that event be suspended or shall lapse.
despite that it continued the policy, it accepted the
renewal premium, then it waives the violation.
Secs. 227(a), 228(a), 230(a): In the case of life or
endowment insurance, group life insurance and
Sec. 75. If specifically stipulated, a violation of
industrial life insurance, the policy holder is entitled
a specified provision shall avoid a policy,
to a grace period of 30 days.
otherwise a breach of immaterial provision
does not avoid the policy
Sec. 78 (infra): acknowledgement of receipt of
premium in policy is binding.
Gen Insurance v. Ng Hua: Stipulation that failure
to give notice that any other insurance was
Sec. 306(2): delivery of policy to agent presumes
obtained would result in forfeiture of the
authority to collect premium.
benefits. The rebel didn’t give notice that
he had insurance on the same goods w/
UCPB v. Masagana Telamart: UCPB is in estoppel
another co. Breach of warranty. Insurer
for having received 60-90 day credit term.
entitled to rescind. Materiality of non-
disclosure of other insurance policies is
Jack:
undoubted.
General rule: non-payment of premiums = policy not
valid and binding.
Sec. 76. Breach of warranty, w/o fraud,
Exceptions:
exonerates insurer or prevents policy from
1.) Acknowledgement in policy that premium has
attaching to risk depending on when breach
been
occurred
paid;
2.) Installment payments – some made then stopped
Breach of warranty…
(can
1.) Without fraud: policy avoided only from
demand for payment of the rest);
time of the
3.) 30 day grace period in life and industrial life
breach and hence, the insured is entitled to:
policies;
a.) a return of premiums paid at the pro rata
4.) Ins. co. agreed to grant credit;
rate from the time of the breach if it occurs
5.) Estoppel.
after the inception of the contract; or
b.) to all the premiums if it is broken during Sec. 78. Legal fiction of payment of premium
the inception of the contract. for purposes of making policy binding:
2.) With fraud: policy avoided ab initio and the Acknowledgment in policy of receipt of premium is
insurer is conclusive evidence of payment for purpose of
not entitled to the return of the premium paid. making policy binding.
When notice of loss must be given: Without If the third person refuses: Insured must furnish
unnecessary delay; within reasonable time. reasonable evidence that the refusal was made NOT
coz of disbelief on the part of the third person in the
Proof of loss: More or less formal evidence of the facts necessary to be certified BUT coz of other
occurrence of loss given the company by the insured grounds.
or claimant under a policy of the occurrence of the
loss, the particulars thereof and the data necessary
to enable the company to determine its liability and Title 11. Double Insurance
the amount thereof.
Sec. 93. When double insurance exists:
Purpose:
1.) To give insurer info by which he may 1.) Person insured is the same;
determine extent of his liability; 2.) Interest insured is the same;
2.) To afford him a means of detecting any fraud 3.) Risk OR peril insured against is the
that may have been practiced upon him; same;
3.) To operate as a check upon extravagant
claims 4.) Subject matter insured is the same; and
5.) Two or more insurers insure separately. 5.) Each insurer is bound, as between
himself and the other insurers, to
Double insurance is NOT the same as over contribute ratably to the loss in proportion
insurance. to the amount for which he is liable under his
contract.
Double insurance Over insurance
Sec 94 applies only when there is over-insurance by
There may be no over Amount of insurance is double insurance, that is, the insurance is contained
insurance as when the beyond the insured’s in several policies & the total amount of which is in
sum total of the amts of insurable interest excess of the insurable interest of the insured.
the policies issued does
not exceed the insurable
interest of the insured. Title 12. Reinsurance
Always Several insurers May only be one insurer
involved Sec. 95. Reinsurance: contract whereby one
party (reinsurer) agrees to indemnify another
Stipulation in policy that double insurance is (reinsured/original insurer), either in whole or
prohibited & violation of stipulation will result in in part, against loss or liability which the latter
avoidance of the policy is VALID and reasonable. (reinsured) may sustain or incur under a
separate & original contract of insurance with
Purpose of prohibition against double insurance: To a third party (original insured).
prevent over insurance & thus avert the perpetration
of fraud. The public & insurer are interested in
Difference between Reinsurance and Double
preventing the situation in which a loss would be
insurance
profitable to the insured.
2 major divisions of transportation insurance: Loan on bottomry: Payable only if vessel is given as
1.) Ocean marine insurance; and security for the loan completes in safety the
2.) Inland marine insurance. contemplated voyage. Lender is entitled to high rate
of interest to compensate him from the risk of losing
Scope of ocean marine insurance: Protection for: his loan. Owner of the vessel receives in case of loss
1.) Ships or hulls; no indemnity BUT he does secure immunity from
2.) Goods or cargoes; payment of the loan.
3.) Earning such as freight, passage money,
commissions, or profits; and Respondentia loan: Loan on goods
4.) Liability incurred by the owner or any party
interested in or responsible for the insured Sec. 102. Meaning of freightage in marine
property by reason of maritime perils. insurance: ALL benefit which is to accrue to the
owner of the vessel from its use in the voyage
Perils of the sea: Casualties due to unusual violence contemplated or the benefit derived from the
OR extraordinary action of wind & wave OR to other employment of the ship
extraordinary causes connected with navigation.
Embraces all kinds of marine casualty such as Sources of freightage:
shipwreck, foundering, stranding, collision & every 1.) Chartering of ship
specie of damage done to ship or goods at sea by 2.) Employment of ship for carriage of owner’s
violent action of the wind & waves or losses goods
occasioned by jettisoning the cargo if it is made for
the purpose of saving a vessel rendered unworthy 3.) Employment of ship for carriage of another’s
during the voyage, NOT thru the fault of the captain. goods
Not covered: Losses resulting from ordinary wear & Sec. 103. Insurable interest of shipowner in
tear OR other damage usually incident to the voyage expected freightage: The shipowner has an
are not included. Mere fact that the injury is due to insurable interest in expected freightage which
the violence of some marine force does NOT according to the ordinary and probable course of
necessarily bring it w/in the protection of the policy things he would have earned but for the intervention
of such violence NOT unusual or unexpected. of a peril insured against or other peril incident to
the voyage.
Perils of the ship: Loss which in the ordinary course
of events, results Sec. 104. When insurable interest in
1.) From natural & inevitable action of the sea freightage of charter party exists: When the
2.) From wear & tear of the ship ship has broken ground on the chartered voyage.
3.) From negligent failure of the ship owner to If a price is to be paid for the carriage of goods, it
provide vessel with proper equipment to exists when:
convey cargo under ordinary conditions (Go 1.) They are actually on board; or
Tiaco v. Union Insurance Society of Canton) 2.) There is some contract for putting them on
board, and both the ship and goods are
The insurer does NOT undertake to insure against ready for the specified voyage.
perils of the ship BUT only perils of the sea. Insured
can hold insurer liable only for perils of the sea. For Sec. 105. Insurable interest in profits. One who
perils of the ship, the injured party must look to the has an interest in the thing from which profits are
ship owner for redress. For the insurer to be liable, expected to proceed has an insurable interest in the
perils of the sea must be the proximate cause of the profits.
loss.
To give an insurable interest in expected freightage,
Scope of Inland Marine Insurance: Risk must involve the insured must have an inchoate right to freight.
an element of transportation. He must be in such position with regard to freight
that nothing could prevent him from ultimately
having a perfect right to it but the intervention of the
Subtitle 1-B. Insurable Interest perils insured against.
Sec. 100. Insurable interest of shipowner when Sec. 106. Insurable interest of charterer of
ship chartered. ship: To the extent that he is liable to be damnified
by its loss.
Insurable interest of owner of the ship: On the vessel
to the extent of its value. He continues to have Insurable interest of a charterer:
insurable interest even if he mortgaged or chartered 1.) Value of ship IF charter stipulates charterer
the vessel to a third person who agrees to pay him to pay ship’s value in case of loss
its value in case of loss. However, the insurer is only 2.) Profit he expects to earn by carrying goods,
liable only for the part of the loss which the insured in excess of the charter hired
cannot recover from the charterer. 3.) Up to the extent that he is liable to be
damnified by its loss.
In marine insurance, the rule is STRICTER coz the Note: Fraudulent intent as ground for rescission is
insured is bound to communicate to the insurer not material only in marine policies. For other insurance
only (1) facts BUT also (2) beliefs or opinions of 3rd contracts, intent is immaterial & the insurer has a
persons OR (3) expectations of 3rd persons. Thus, right to rescind in case of misrepresentation or
there is concealment where the insured at the time concealment.
of application for insurance did not disclose the
opinion of marine experts who inspected the vessel
insured that it was unseaworthy. Subtitle 1-E. Implied Warranties
Sec. 109. Presumption of knowledge of prior Sec. 113. Seaworthiness of ship an implied
loss warranty in marine insurance
Sec 109 establishes a rebuttable presumption of Warranty: Stipulation, either expressed or implied,
knowledge of a prior loss on the part of the insured forming part of the policy as to some fact,
“if the info might possibly have reached him in the conditions, or circumstance relating to the risk.
usual mode of transmission at the usual rate of
communication. Implied Warranties:
1.) Seaworthiness at inception of voyage (Sec.
Reason: Quickness in transmission of news by 113);
means of modern communications 2.) Carry proper documents if nationality
expressly warranted (Sec. 120);
Sec. 110. Concealment in marine insurance 3.) No improper deviation (Secs. 123-125);
does not vitiate entire contract but merely 4.) Not an illegal venture (Vance).
exonerates insurer with respect to matters
enumerated Roque v. IAC: Roque insured its logs with Pioneer
1.) National character of the insured; Insurance. The logs were loaded on Mla Bay
2.) Liability of the thing insured to capture and Lighterage Corporation’s barge which sank. Pioneer
detention; Insurance denied liability as the ship was not
3.) Liability to seizure from breach of foreign seaworthy. Was the ship seaworthy?
laws of trade; NO. Seaworthiness as to the ship is different as to
4.) Want of necessary documents; seaworthiness as to the cargo. In this case, the
5.) Use of false and simulated papers. vessel was seaworthy as to the ship BUT NOT
seaworthy as to the cargo.
General Rule: Concealment of material fact entitles Cargo can be the subject of marine insurance &
the injured party to rescind the entire contract of once it is contracted, the implied warranty of
insurance. seaworthiness immediately attaches to whoever is
insuring the cargo, w/r he be the owner or not.
Exception: Under this Section, concealment of any of Cargo owner has the obligation to choose a common
the matters enumerated does NOT avoid the policy carrier that takes care of its ships. While the cargo
ab initio. owner has no control over the ship itself & its
seaworthiness, he has control over the choice of
If the vessel is lost by any of the causes in 110 shipping company to use.
which was concealed, insurer is NOT liable. The cause of the loss was perils of the ship & NOT
perils of the sea. An insurer is only liable for perils of
If vessel is lost by other perils of the sea like a storm, the sea.
the insurer is liable.
Sec. 114. Meaning of seaworthiness:
Reasonably fit to perform the service, and to
Subtitle 1-D. Representation encounter the ordinary perils of the voyage,
contemplated by the parties to the policy.
Sec. 111. Marine insurer entitled to rescind
contract if representation is intentionally false Sec. 115. Seaworthiness satisfied if ship
in any material aspect seaworthy at start of voyage; Exceptions:
Sec. 117. Where different portions of voyage Subtitle 1-F. The Voyage & Deviation
are contemplated in the policy, a ship must be
seaworthy at start of every portion Sec. 121. Voyage contemplated by marine
insurance policy with points of departure and
Sec. 118. Unseaworthiness during the voyage ending refers to route fixed by mercantile
must be attended to by shipowner or captain usage
without reasonable delay, otherwise insurer
exonerated from loss Sec. 122. If sailing route is not fixed by
mercantile usage, the voyage insured is that
Sec. 119. Seaworthiness of vessel for hull to which a master of ordinary skill and
insurance is not necessarily seaworthiness for discretion would be most natural, direct and
purposes of cargo insurance advantageous
Seaworthiness: Relative term depending upon the Sec. 123. Deviation is:
nature of the ship, the voyage, and the service in 1.) A departure from the course of the
which she is at the time engaged. voyage
2.) Unreasonable delay in pursuing voyage
Compliance of Seaworthiness: 3.) The commencement of an entirely
General Rule: Complied with if the ship be different voyage
seaworthy at time of commencement of the risk.
Prior or subsequent seaworthiness is not a breach of Deviation: Unexcused departure from the regular
the warranty; nor is it material that the vessel course or route of the insured voyage OR any other
arrives in safety at the end of her voyage. There is act which substantially alters the risk
no implied warranty that the vessel will remain in
seaworthy condition throughout the life of the policy. 4 cases of deviation:
Exceptions: 1.) Departure from course of sailing fixed by
1.) TIME POLICY: seaworthy at commencement mercantile usage
of EVERY voyage she may undertake 2.) NOT FIXED BY MERCANTILE USAGE:
2.) CARGO POLICY: seaworthy at departure from most natural, direct, &
commencement of EACH PARTICULAR advantageous route
VOYAGE 3.) Unreasonable delay in pursuing voyage
3.) VOYAGE POLICY: contemplating a voyage in 4.) Commencement of entirely different voyage
different stages, seaworthy at
commencement of EACH PORTION. In case of proper deviation, the effect is as if there
was no deviation at all. Hence, it is not that the
Jack: Now a vessel is seaworthy when it is fit to insurer is exonerated from liability, BUT that the
perform the services and encounter the perils of the INSURER WAS NEVER LIABLE.
voyage contemplated. And the implied worthiness is
complied with when the vessel is seaworthy, when it Sec. 124. Instances when deviation is proper:
commences the voyage. However, if the policy is for 1.) When caused by circumstances over which
a specific length of time let us say a year, then the neither the master nor the owner of the ship
vessel must be seaworthy, every time it leaves for a has any control;
voyage. If it is an insurance of the cargo with 2.) When necessary to comply with a warranty,
different ships, every vessel must be seaworthy. If or to avoid a peril, whether or not the peril is
you have equipment from Japan which will be insured against;
transported by a Japanese vessel from Tokyo to 3.) When made in good faith, and upon
Manila, and Manila to Cebu by a domestic vessel, all reasonable grounds of belief in its necessity
the vessels must be seaworthy. Now the to avoid peril; or
seaworthiness not only applies to the structure of 4.) When made in good faith, for the purpose of
the ship but it must also be properly loaded. For saving human life or relieving another vessel
example, the sides of vessels are painted in two in distress.
colors red and black, the dividing line means that the
water cannot go beyond that line, if it goes beyond, Sec. 125. Deviation not specified in Sec. 124 is
it means it is overloaded. It must also be provided improper
with a competent master, one who is fully qualified
and had passed all examinations. Then you must Sec. 126. Insurer not liable if loss occurred
also have the requisite equipment, radar, radio etc. after an improper deviation
Now if there are different portions of the voyage,
then the vessel must be seaworthy for every portion.
If the vessel becomes unseaworthy and there is
Kinds of deviation:
unreasonable delay in making repairs, then the
Effect of improper deviation: Insurer becomes Sec. 133. Liability of insurer continues during
immediately absolved from further liability under the reshipment if ship is prevented from
policy for losses occurring SUBSEQUENT to (NOT completing voyage by a peril insured against
before!) the deviation, notwithstanding the fact that
the deviation did not increase the risk not in any Type of insurance contemplated under 133: Cargo.
wise contribute to the loss.
It is well-settled that if the original ship be disabled,
and the master. Acting with wise discretion forwards
Subtitle 1-G. Loss the cargo in another ship, such necessary and
justifiable change of ship will not discharge the
Sec. 127. Loss is either total or partial underwriter on the goods from liability for any loss
which may take place on goods subsequent to such
Sec. 128. When loss not total, it is partial reshipment. In any case however, the insurer may
always require an additional premium if the hazard
Sec. 129. Total loss is either actual or is increased by the extension of liability.
constructive
Sec. 134. Marine insurer also liable for
Sec. 130. Actual loss and causes thereof damages, expenses for discharging, storage,
reshipment, extra freightage and other
Kinds of losses: expenses in saving cargo reshipped – but only
1.) Total up to amount insured
a.) Actual
b.) Constructive Expenses contemplated in 134: Those necessary to
2.) Partial complete the transportation of cargo reshipped
under Sec. 133.
Effect of total loss: Underwriter is liable for the
WHOLE AMOUNT INSURED The insurer is liable for them in addition to paying for
any loss or damage which may take lace on the
Actual Total Loss: SM of insurance is wholly goods, due to the perils insured against. The liability
destroyed or lost or when it is so damaged as no however of the insurer under Sec. 134 cannot
longer to exist in its original character. Complete exceed the amount of the insurance.
physical destruction is not essential to constitute
actual total loss. Sec. 135. Insured entitled to payment in actual
total loss; no need of abandonment
Causes:
1.) Total destruction of the thing insured In case of actual total loss, the right of the insured to
2.) The irretrievable loss of the thing by sinking claim the whole insurance is absolute. Hence, he
OR by being broken up need not give notice of abandonment nor formally
3.) Any damage to the thing which renders it abandon to the insurer anything that may remain of
valueless to the owner for the PURPOSE for the insured property.
which he held it
4.) Any other event which effectively deprives Pan Malayan Ins. v. CA: FAO transported its rice
the owner of the possession, at the port of seeds to Vietnam. Barge sank in the China Sea.
destination, of the thing insured. Some bags of seed were recovered.
Still an absolute total loss. All bags were rendered
Malayan v. CA: TKC Mktg insured its soya bean valueless for their purposes since when they got
meal with Malayan Ins. Co. While docked in Durban, wet, they started to germinate. Since absolute total
South Africa, shipment arrested and detained. loss, no need for notice of abandonment.
Malayan liable for loss. “Arrest” caused by ordinary
judicial process included among the covered risks. Sec. 136. Free from particular average (FPA)
There was a constructive total loss over the cargo. coverage does not cover particular or simple
average losses unless loss is total; but insurer
Sec. 131. Constructive total loss or “technical liable for general or gross average loss
total loss” is one which gives insured the right
to abandon under Sec. 139 Average: Any extraordinary or accidental expense
incurred during the voyage for the preservation of
Constructive total loss: One in which the loss, the vessel, cargo or both; and all damages to the
although not actually total, is of such a character vessel and cargo from the time it is loaded and the
that the insured is entitled, if he thinks fit, to treat it voyage commenced, until it ends and the cargo is
as a total loss by abandonment. unloaded (Art. 806, Code of Commerce)
Effect of valid abandonment: It transfers to the Sec. 152. Abandonment is irrevocable unless
underwriter the interests in the subject matter ground is unfounded
covered by the policy subject to the rights and
interests, if any, of third persons. The underwriter Effect of acceptance of abandonment:
acquires thereby the entire interest insured, 1.) Insurer becomes at once liable for the whole
together with all its incidents, including rights of amount of the insurance;
action which the insured has against third persons 2.) Insurer becomes entitled to all rights which
for injury. In other words, the insurer becomes the insured possessed in the thing insured;
entitled to all the rights which the insured possessed 3.) Fixes the rights of the parties. It is conclusive
in the thing insured. upon them and is irrevocable.
Sec. 147. If marine insurer pays for loss as if Therefore, the acceptance of an abandonment
actual total loss, the he is entitled to estops the underwriter from relying on any
remainder of thing insured, proceeds, or insufficiency in the form, time or right of
salvage as if abandoned abandonment. Except: when the ground upon which
the abandonment is made proves to be unfounded.
When formal abandonment necessary: Only in
constructive loss. Sec. 153. In an accepted abandonment of ship,
freightage before loss belongs to insurer of
Situation contemplated by this article: There is a freightage; freightage after belongs to insurer
constructive loss but without waiting for a formal of ship
abandonment, the insurer (magnanimously) pays
the insured as if the loss were actual and total. The Right to freightage of insurer of ship: When
law then steps in and says that since the insurer abandonment is validly made, the interest of the
paid and the insured accepted, we will consider that insured in the thing covered passes to the insurer.
as an offer and acceptance of abandonment. Hence, The insurer of the ship becomes the owner thereof
from that time on, the insurer is entitled to whatever after an abandonment, and his title becomes vested
may remain of the thing insured, or its proceeds or as of the time of the loss. Hence, freightage earned
salvage. subsequent to the loss belongs to the insurer of the
ship.
Sec. 148. Upon abandonment, acts done in
good faith by agents of insured after loss are Right to freightage of insurer of freightage: The
at risk of insurer and for his benefit (agent of insurer of the freightage is subrogated to the rights
the insured becomes agent of the insurer. of the insured at the time of the loss hence any
Sec. 154. If insurer refuses to accept valid Meaning: In every marine insurance, the insured is
abandonment, he is liable for actual total loss expected to cover by insurance the full value of the
less proceeds from thing insured in hands of property insured. However, there are instances when
insured people insure for less than their interest. So if the
value of the insured’s interest exceeds the amount
Effect on the insurer’s liability if he refuses to accept of insurance, the insured is considered a co-insurer
valid abandonment: He is liable as upon an actual for an amount determined by the difference between
loss less any proceeds the insured may have the insurance taken out and the value of the
received on account of the damaged property as property.
when the insured succeeds in selling the property as
damaged. Circumstances in which Section 157 will apply:
1.) Loss is partial; and
Formula: 2.) Amount of insurance is less than the
Liability of insurer = Actual loss – Any Proceeds insured’s entire insurable interest in the
Received by property insured
the Insured.
Compare with Sec. 172 (fire insurance) – no co-
If abandonment was improper, the insured may insurance in fire insurance unless stipulated
nevertheless recover to the extent of the damage
proved. Sec. 158. Where profits are separately insured,
the insured is entitled to a proportion of
Sec. 155. If insured does not abandon, he can profits lost, equivalent to proportion of
recover actual loss property lost bears to value of whole
Effect of insured’s failure to abandon: The insured Sec. 159. In a valued marine policy of
has an election to abandon or not, and he cannot be freightage or cargo, if part of subject is
compelled to abandon although abandonment is exposed to risk, valuation applies in
proper. He may await the final event, and recover proportion to such part
accordingly for a total or partial loss, as the case
may be. Meaning: When cargo is insured under a valued
policy but only a portion of the cargo is actually
carried by the vessel at the time of loss, the
Subtitle 1-I. Measure of Indemnity valuation will be reduced proportionately. The
insurer is bound to return such portion of the
Sec. 156. Valuation in an marine policy (valued premium as corresponds with the portion of the
policy) is conclusive between parties; cargo which had not been exposed to the risk.
exception: hypothecation by bottomry or
respondentia before insurance; fraudulent Sec. 160. When profits valued, loss is
valuation entitles insurer to rescind conclusively presumed from loss of property
from which they arise and valuation fixes their
Object of valuation: It may happen that when a amount
vessel is insured for a long time or for a long voyage,
her value at the end of the voyage may not be the Meaning: If the property is totally lost, then
same as at the beginning. Hence, we resort to consequently, the total profits are also lost. Such
valuation in order to fix in advance the value of the loss of profits are conclusively presumed from the
property ands thus, avoid the necessity of proving its loss of the property and the valuation agreed upon
actual value in case of loss. in the policy fixes the amount of recovery.
Insured value: That stated in the policy. It is Sec. 161. Rules in estimating loss in a marine
conclusive upon the parties provided that the open policy regarding values of:
insured has some interest at risk, and there is no 1.) Ship – Value at the beginning of the risk.
fraud on his part. 2.) Cargo – Its actual cost to the insured, when
laden on board, or where that cost cannot be
In case of fraud on part of insured in stating the ascertained, its market value at the time and
value: Insurer may rescind the contract. place of lading.
3.) Freightage – Gross freightage, exclusive of
In a valued marine policy, when the thing insured is primage, without reference to the cost of
lost, neither party is permitted to give evidence of earning it.
the real value of the thing. 4.) Cost of insurance added to value estimated
Reason: There was already a conclusive value given In determining the loss under an open policy of
to it by the parties in the policy. marine insurance, the real value of the thing insured
must be proved by the insured in each case. Section
Exception: If the thing has been hypothecated by 161 lays down the rules in ascertaining the value to
bottomry or respondentia before it was insured, and be used for indemnity purposes.
such hypothecation is WITHOUT the knowledge of
the person who procured the insurance, the real Sec. 162. Rule when cargo insured against
value of the thing MAY BE SHOWN by the insurer. partial loss arrives in damaged condition; loss
is deemed in same proportion as market price
See Sec. 161 for marine open policies of damaged goods bears to market price of
goods in sound condition in port of destination
Sec. 157. In a marine policy in case of partial
loss the insurer is liable only for a proportion Section 162 applies if:
1.) The cargo is insured against partial loss; and
Sec. 164. Marine insurer liable for general Liability of the insurer in case of partial loss of the
average loss contribution in proportion to ship or its equipment: 2/3 cost of repairs. “1/3 new
what insured value bears to contributing value for old” on the theory that the new materials render
of thing insured the ship more valuable than it was before the loss.
Jarque v. Smith Bell: Jarque owned the motorboat Sec. 167. Fire insurance includes insurance
Pandan which he insured with Nat’l Union Fire Ins. against fire, lightning, windstorm, tornado,
Co. for absolute total loss only. Due to very heavy earthquake & other allied risks if these are
sea, they had to jettison cargo. Ins. co. liable to stipulated in fire policies or in separate
contribute? policies
YES. Liability for contribution in general average is
not based on express terms of policy, but rests upon Fire insurance: A contract of indemnity by which the
the theory that from the relation of the parties and insurer for a consideration, agrees to indemnify the
for their benefit, a quasi-contract is implied by law. insured against the loss of or damage to, a property
Art. 859 of Code of Commerce is mandatory. by fire. As used in this Code, it includes loss also by:
Insurers are bound to contribute to indemnity of the 1.) Lightning;
general average. This simply places the insurer on 2.) Windstorm;
the same footing as other persons who have an 3.) Tornado;
interest in the vessel, or the cargo therein. The 4.) Earthquake; and
jettison was as much to the benefit of the 5.) Other allied risks.
underwriter as to the owner, if jettison had not taken But only when such risks are covered by extension
place and the ship foundered, insurer would have to fire insurance policies or under separate policies,
had to pay a lot more money. subject to the payment additional premiums.
Sec. 165. Marine insurer is liable for general Nature of fire insurance: Contract of indemnity.
average loss and is subrogated to insured’s Indemnity is its sole purpose and any contract that
right to general average contribution, but shall contemplates a possible gain to the insured by the
not be liable happening of the event upon which the liability
1.) When insurer is made liable after becomes fixed is contrary to the proper nature of
separation of interests liable to insurance and is not allowed.
contribution;
2.) When insured neglected or waived the Jack: Fire insurance policy only insures against
right to demand contribution from hostile fire not friendly fire (e.g. gas range fire,
others bonfire). Restaurant cannot collect due to soot on
the wall caused by gas range. Friendly fire yun eh.
Rights of the insured in case of general average: The Normally the policy provides that the insurer is not
insurer is liable for any general average loss where it liable for loss caused due to war or rebellion and the
is payable or has been paid by the insured in like. Buildings burned down by Japanese in WWII not
consequence of a peril insured against. The insured covered. BUT if there is one building that was
may either hold the insurer directly liable for the independently burned (the japs didn’t do it) that one
whole of the insured value of the property sacrificed building may recover under the insurance policy.
for the general benefit, subrogating him to his own
right of contribution, or demand contribution from Sec. 168. Change within control of insured, in
the other interested parties as soon as the vessel use or condition of thing insured, without
arrives at her destination. In other words, the consent of insurer increasing the risk entitles
insured need not wait for an adjustment of the insurer to rescind
average.
Jack: Section 168 talks of alteration. For example is
There can be no recovery for general average this case where the SC ruled that there was
against the insurer: alteration, when the building is insured as a
1.) After the separation of the interests liable to bookstore, but it was converted into a restaurant,
contribution, or rather, after the cargo liable also because there is an increase in risk. Another
for contribution has been removed from the example is when one stores canvass in the premises
vessel; or (inflammable), or when the place is insured as a
2.) When the insured has neglected or waived residence but used to store leather and other
his right to contribution. flammables.
Jack: For example is when a place is insured a Sec. 174. Casualty insurance is insurance
residential condominium but is converted into an covering loss or liability arising from accidents
office condominium, there is no increased risk, and or mishaps outside coverage of fire or marine
no alteration. insurance. It includes workmen’s
compensation, employer’s liability, public
Sec. 170. Act of insured increasing risk and is liability, motorcar, plate glass, burglary and
cause of loss but which does not violate fire theft, personal accident and health insurance
policy provisions does not affect fire policy as written by non-life insurance companies
Sec. 171. If no valuation in policy (open Casualty insurance: Includes all forms of insurance
policy), measure of indemnity is replacement against loss or liability arising from accident or
cost; if there is valuation (valued policy), same mishap which are not within the scope of other
rule as in marine insurance (conclusive types of insurance, namely marine, fire,
between parties) suretyship and fire.
Sec. 172. If insured desires valuation in a fire Liability insurance: It is a contract of indemnity for
policy – an independent appraiser may be the benefit of the insured and those in privity with
hired by insured at his expense & value can him, or those to whom the law upon the grounds of
then be fixed between him and insurer and a public policy extends the indemnity against liability.
clause then stipulated mentioning value. Value Under policies of this type, an indemnity is provided
stated is maximum of insurer’s liability. Full to the insured in respect of his legal liability to pay
amount of partial loss is payable. Parties can damages, usually arising out of negligence or
also stipulate that repair, replacement or nuisance and occasionally, under contract.
rebuilding of buildings be done
Insurable liability: Liability which arises from the
Unlike in marine insurance, in the absence of commission of a quasi-delict or a tort is insurable.
stipulation, insured is not a co-insurer under fire However, if the liability arose from the commission
policies. Thus, if property valued at P10,000 is of a crime, it depends. If the liability arose out of
insured for P5,000 and is damaged by fire to the acts of negligence which are also criminal, they may
extent of one-half of its value, the insurer will be be insurable on the ground that such acts are
compelled to pay the entire P5,000 necessary to ACCIDENTAL. Example is motor insurance policy
repair the loss. covering the insured’s liability for accidental injury
caused by negligence, even if it so gross resulting to
To avoid such a situation, fire insurers insert 2 types homicide.
of clause in their policy: On the other hand, if the liability arose out of
1.) Co-insurance clause; and DELIBERATE criminal acts, such is not insurable.
2.) Option to rebuild clause.
Jack: Where an insurance policy insures directly
Co-insurance clause: A clause requiring the insured against liability, the insurer’s liability accrues
to maintain insurance to an amount equal to the immediately upon the occurrence of the injury upon
value or specified percentage of the value of the which the liability depends, and does not depend on
insured property under penalty of being a co-insurer the recovery of judgment by the injured party
to the extent of such deficiency. In other words, this against the insured.
clause is inserted to make the insured a co-insurer. Usually, these contracts contain a provision that in
case of suit against the insured, the insurance
Stokes v. Malayan Insurance: Owner’s car, when Finman Gen. Ins. v. CA: Charlie was stabbed to
in collision, driven by James Stokes, who was death at a maskara festival. There was no motive for
authorized to do so by owner. Stokes is Irish. He was the stabbing – thrill killing. Finman says that death
here for more than 90 days. by assault/murder is not included in the policy.
NOT authorized driver. Tourists who are licensed to Finman liable. There was no voluntary act of Charlie
drive in own country can drive in phils. However, that led to his death. He did not mean to get in the
after 90 days, they should pay fees and carry a path of a psychotic murderer nor in the way of the
license to still be able to drive here. latter’s knife. It was a case of pure accident. No
stipulation that death by assault/murder excluded.
Gutierrez v. Capital Insurance: Jeepney got into a
collision. Passenger killed. Jeepney driver licensed Jack: Another case: A group of policemen and a
for years 1962 and 1963 but at the time of the security guard were chasing a robber. The robber
accident, did nto have license. Instead, he had a fired killing the security guard. It was ruled as
carbon copy of a traffic violation report which served accidental death, because the victim was chosen at
as temporary operator’s permit but only for 15 days. random. Hence the guard’s heirs can collect.
15-day period had already expired. Another case: if a robber holds up a bus he was
NOT authorized driver. Barred from recovery under riding and before he leaves shoots at one of the
policy passengers. Accident.
Jack handled this case where in this restaurant, a
Palermo v. Pyramid Insurance: Claim was customer tried to leave without paying. He was able
disallowed since insured was driving with an expired to momentarily leave the premises. One of the
driver’s license. Tama ba ang disallowance? customers wanted to avoid the fracas, so he paid
NO. Driver of the vehicle at the time of accident was then left. When he stepped out the door, the
the insured himself, hence, an authorized driver. The estafador customer (thinking he was one of the
requirement that the driver be permitted in waiters out to catch him) shot him. Error in
accordance with the licensing and other personae. Accident.
laws/regulations applies only when the driver is
driving on the insured’s order/with his permission. It Gabriel v. CA: Gabriel, insured, was employed at
does not apply when the person driving is the contruction project in Iraq and covered by a personal
insured himself. accident insurance under a group policy. The insured
risk was for bodily injury caused by violent
Perla Cia de Seguros v. CA: While the car was accidental external and visible means which injury
parked it was carnapped. Ins. Co. denied claim since would solely and independently of any other cause
person who was driving the vehicle before it was result in death/disability. He died. Wife claimed
carnapped was in possession of an expired driver’s insurance. The only evidence given was wife’s own
license and hence, not an authorized driver. affidavit and a letter of a co-worker.
Persons subject to CMVLI requirement: Under the ‘no-fault indemnity clause,’ the person
1.) Motor vehicle owner or one who is the actual injured or the heirs may claim up to P5,000—without
legal owner of a motor vehicle whose name need of establishing whose fault or who is liable for
such vehicle is registered with the LTO; or the accident. That the said vehicle might not be the
2.) Land transportation operator or one who is one who caused the accident is immaterial since the
the owner of a motor vehicle being used for law provides that the party paying the claim may
conveying passengers for compensation later on recover against the owner of the vehicle
responsible for the accident. This is precisely the
Jack: Every vehicle must have compulsory insurance, essence of the ‘no-fault indemnity’ insurance, to
otherwise you can’t drive it on the road. provide victims immediate compensation although in
Even if the policy provides that final judgment is a limited amount, pending final determination of who
needed before liability attaches, it’s a void provision. is responsible for the accident and liable for the
Who can file claim: Lawyer goes to a conference and victim’s injuries or death. Nevertheless, he or his
his secretary is with him to take down notes. If they heirs may only claim from one vehicle and if the
have an accident she can’t file a claim because her person injured wishes to claim more he must
presence in the vehicle arises out of the course of establish fault or liability as to who caused the
employment. But if they’re out on a date she can accident.
file. If the lawyer is married I doubt if she’ll file the
claim. Jack Requisites for insurer to be liable under “no
Joyride – can claim under theft (Villacorta). fault indemnity” provision:
Importance of a license: If the insured himself is the 1.) The claim is for death or injury to any
driver, he has the right to recover damages even if passenger or third party;
his license has expired. If the driver is merely 2.)The total indemnity in respect of any one
authorized by the owner, then the authorized driver person does not exceed P5,000; and
must have a valid license (hindi expired), otherwise 3.) The necessary proof of loss under path to
the claim is barred. substantiate the claim must be submitted.
Sec. 375. Insurance Commissioner to furnish Jack: In case of death, you submit the death
list of authorized insurance companies. certificate. In case of injury, you submit a medical
report. In ALL cases, however, you have to submit a
Sec. 376. Evidence of 3rd party liability police report.)
coverage required prior to motor vehicle
registration or renewal Jack Which insurer is liable under the no-fault
indemnity” provision? A claim under the “no fault
Prerequisite before a motor vehicle is registered and indemnity” provision may be made against the
operated: Sec 374 prohibits a land transportation insurer of one motor vehicle only. Such claim may be
operator or a motor vehicle owner from operating his made directly by the injured party against the
vehicle in public highways unless there is in force in insurer as follows:
relation thereto a policy insurance or guaranty in 1.) In case of an occupant of a vehicle, claim
cash or surety bond to indemnify the death or bodily shall lie against the insurer of the vehicle in which
injury of a third party or of a passenger, arising from the occupant is riding, mounting, or dismounting
from;
Jacl: Because of Section 180, the father (or in his Sec. 183. Measure of indemnity under life
absence, the mother) is now authorized to do acts of insurance policy is face amount of policy
ownership (e.g., obtaining a policy loan, unless interest of person insured is
surrendering the policy) without judicial authority, so measurable (Life insurance is a valued policy)
long as the interest of the minor does not exceed
P50,000. The interest of the minor is based on the
face value of the policy and not on its cash surrender CHAPTER III – THE BUSINESS OF INSURANCE
value.
Jack: You need a certificate of authority from the
Life insurance may be made payable: commissioner before you can engage in the
1.) On the death of the person;
Good Luck!