INSURANCE Beda Reviewer PDF
INSURANCE Beda Reviewer PDF
INSURANCE Beda Reviewer PDF
30
MEMORY AID IN COMMERCIAL LAW
INSURANCE CODE
(P.D. No. 1460)
and the interest in the insurance are a. A party knows a fact which he
vested in the same person. (Sec. 20) neglects to communicate or
disclose to the other.
b. Such party concealing is duty
bound to disclose such fact to
EXCEPTIONS: the other.
1. In life, health and accident c. Such party concealing makes no
insurance.(Sec. 20); warranty as to the fact
2. Change in interest in the thing concealed.
insured after occurrence of an d. The other party has not the
injury which results in a loss. means of ascertaining the fact
(Sec. 21); concealed.
3. Change in interest in one or e. Material
more of several distinct things Effects: Entitles insurer to rescind,
separately insured by one policy. even if the death or loss is due to a
(Sec. 22); cause not related to the concealed
4. Change of interest, by will or matter (Sec. 27).
succession, on the death of the Note: Good Faith is not a defense in
insured. (Sec. 23); concealment. Sec. 27 clearly provides
5. Transfer of interest by one of that, “the concealment whether
several partners, joint owners, intentional or unintentional entitles the
or owners in common, who are injured party to rescind the contract of
jointly insured, to others. (Sec. insurance.”
24);
6. When a policy is so framed that Test of Materiality: Determined not by
it will inure to the benefit of the event, but solely by the probable
whomsoever, during the and reasonable influence of the facts
continuance of the risk, may upon the party to whom the
become the owner of the communication is due, in forming his
interest insured. (Sec. 57); estimate of the advantages of the
7. When there is an express proposed contract, or in making his
prohibition against alienation in inquiries (Sec. 31).
the policy, in case of alienation, Exception to Sec. 31:
the contract of insurance is not a. Incontestability clause
merely suspended but avoided. b. Matters under Sec.110 (marine
(Art. 1306, NCC). insurance)
are untrue. Reason: The insurer cannot that purpose. (Insular Life Assur. Co. vs.
rely on those statements. He must make Feliciano, 74 Phil. 469)
further inquiry. (Philamcare Health
Systems vs. CA, G.R. No. 125678, March 3. Warranties – Statement or promise
18, 2002). by the insured set forth in the policy or
by reference incorporated therein, the
2. Representations – Factual untruth or non-fulfillment of which in
statements made by the insured at the any respect, and without reference to
time of, or prior to, the issuance of the whether insurer was in fact prejudiced
policy to give information to the insurer by such untruth or non-fulfillment,
and induce him to enter into the renders the policy voidable by the
insurance contract. They are considered insurer.
an active form of concealment. Purpose: To eliminate potentially
Requisites of a false representation increasing hazards which may either be
(misrepresentation): due to the acts of the insured or to the
a. The insured stated a fact which change to the condition of the property.
is untrue. Kinds:
b. Such fact was stated with a. EXPRESS – an agreement expressed in
knowledge that it is untrue and a policy whereby the insured stipulates
with intent to deceive or which that certain facts relating to the risk are
he states positively as true or shall be true, or certain acts relating
without knowing it to be true to the same subject have been or shall
and which has a tendency to be done.
mislead. b. IMPLIED - it is deemed included in the
c. Such fact in either case is contract although not expressly
material to the risk. mentioned. Example: In marine
Characteristics: insurance, seaworthiness of the vessel.
a. It is not a part of the contract but Effects of breach of warranty:
merely a collateral inducement to it. a. Material
b. It may be oral or written. GENERAL RULE: Violation of material
c. It is made at the same time of issuing warranty or of a material provision of a
the policy or before but not after. policy will entitle the other party to
d. It may be altered or withdrawn before rescind the contract. (Sec. 74)
the insurance is effected but not EXCEPTIONS:
afterwards. a. Loss occurs before the time of
e. It always refers to the date the performance of the warranty.
contract goes into effect. b. The performances becomes
Kinds: unlawful at the place of the
a. AFFIRMATIVE – affirmation of a fact contract.
when the contract begins; and c. Performance becomes
b. PROMISSORY – promise to be impossible. (Sec. 73)
performed after policy was issued. b. Immaterial (ex. Other insurance
Effect of Misrepresentation: the injured clause)
party is entitled to rescind from the time GENERAL RULE: It will not avoid the
when the representation becomes false. policy.
EXCEPTION: When the policy expressly
Test of Materiality: Same as that in provides or declares that a violation
concealment. thereof will avoid it. (Sec. 75)
It shall commence from the denial of Classes of inland marine insurance:
the claim, not from the resolution of the (Prof. De Leon, p. 325)
motion for reconsideration, otherwise it 1. Property in transit – provides
can be used by the insured as a scheme protection to property
or device to waste time until the frequently exposed to loss while
evidence which may be used against him it is transportation form one
is destroyed. (Sun Insurance Office, Ltd. location to another.
v. CA, 195 SCRA) 2. Bailee liability - insurance for
4. In CMVLI, the written notice of claim those who have temporary
must be filed within 6 months from the custody of the goods.
date of the accident otherwise the claim 3. Fixed transportation property –
is deemed waived. The suit for damages they are so insured because they
either with the proper court or with the are held to be an essential part
Insurance Commissioner should be filed of the transportation system
within 1 year from the date of the denial such as bridges, tunnels, etc.
of the claim by the insurer, otherwise 4. Floater – provides insurance to
claimant’s right of action shall prescribe. follow the insured property
(Sec. 384) wherever it may be located,
subject always to the territorial
PARTICULAR KINDS OF INSURANCE limits of the contract.
CONTRACTS Insurable interest:
A.
XVI. MARINE INSURANCE 1. Shipowner
Insurance against risks connected with a. Over the vessel to the
navigation, to which a ship, cargo, extent of its value, except
freightage, profits or other insurable that if chartered, the
interest in movable property, may be insurance is only up to the
exposed during a certain voyage or a amount not recoverable
fixed period of time. (Sec. 99) from the charterer. (Sec.
Coverage: 100).
A. b. He also has an insurable
1. Vessels, goods, freight, cargo, interest on expected
merchandise, profits, money, freightage. (Sec. 103).
valuable papers, bottomry and c. No insurable interest if he
respondentia, and interest in respect will be compensated by
to all risks or perils of navigation; charterer for the value of
2. Persons or property in connection the vessel, in case of loss.
with marine insurance; 2. Cargo owner
3. Precious stones, jewels, jewelry and Over the cargo and expected
precious metals whether in the profits (Sec. 105).
course of transportation or 3. Charterer
otherwise; and Over the amount he is liable to
4. Bridges, tunnels, piers, docks and the shipowner, if the ship is lost
other aids to navigation and or damaged during the voyage
transportation. (Sec. 99) (Sec. 106).
Cargo can be the subject of
marine insurance, and once it is B.
entered into, the implied In loans on bottomry and respondentia
warranty of seaworthiness Repayment of the loan is subject to the
immediately attaches to condition that the vessel or goods,
whoever is insuring the cargo, respectively, given as a security, shall
whether he be the shipowner or arrive safely at the port of destination.
not. (Roque v. IAC, 139 SCRA 1. Owner/Debtor
596)
B. Marine Protection and Indemnity
Insurance
material and must be need not be ship be seaworthy at the time of the
communicated communicated commencement of the risk. Prior or
unless it proceeds subsequent unseaworthiness is not a
form an agent of breach of the warranty nor is it material
the insured whose
that the vessel arrives in safety at the
duty it is to give
information end of her voyage.
The concealment of Concealment of any EXCEPTIONS:
any fact in relation to material fact will 1. In the case of a time policy, the ship
any of the matters vitiate the entire must be seaworthy at the
stated in Sec. 110 contract, whether commencement of every voyage she
does not vitiate the or not the loss may undertake
entire contract but results for the risk 2. In the case of cargo policy, each
merely exonerates the concealed. vessel upon which the cargo is
insurer from a risk
shipped or transshipped, must be
resulting from the fact
concealed seaworthy at the commencement of
each particular voyage
IMPLIED WARRANTIES
3. In the case of a voyage policy
1. Seaworthiness of the ship at the
contemplating a voyage in different
inception of the insurance (Sec.
stages, the ship must be seaworthy
113);
at the commencement of each
2. Against improper deviation (Sec.
portion
123, 124, 125);
3. Against illegal venture;
Applicability of implied warranty of
4. Warranty of neutrality: the ship will
seaworthiness to cargo owners: It
carry the requisite documents of
becomes the obligation of a cargo owner
nationality or neutrality of the ship
to look for a reliable common carrier,
or cargo where such nationality or
which keeps its vessels in seaworthy
neutrality is expressly warranted;
conditions. The shipper may have no
(Sec. 120)
control over the vessel but he has
5. Presence of insurable interest.
control in the choice of the common
carrier that will transport his goods
While the payment by the insurer for
(Roque v. IAC, 139 SCRA 596).
the insured value of the lost cargo
operates as a waiver of the insurer’s
Deviation
right to enforce the term of the implied
A departure from the course of the
warranty against the assured under the
voyage insured, or an unreasonable delay
marine insurance policy, the same
in pursuing the voyage or the
cannot be validly interpreted as an
commencement of an entirely different
automatic admission of the vessel’s
voyage. (Sec.123)
seaworthiness by the insurer as to
foreclose recourse against the common Instances:
carrier for any liability under the 1. Departure of vessel from the
contractual obligation as such common course of the sailing fixed by
carrier. (Delsan Transportation Lines vs. mercantile usage
CA, 364 SCRA 24) 2. Departure of vessel from the
most natural, direct and
Seaworthiness advantageous route if not fixed
by mercantile usage
A relative term depending upon the
3. Unreasonable delay in pursuing
nature of the ship, voyage, service and
voyage
goods, denoting in general a ship’s
4. Commencement of an entirely
fitness to perform the service and to
different voyage (Secs. 121-123)
encounter the ordinary perils of the
voyage, contemplated by the parties to Kinds:
the policy (Sec. 114). 1. Proper -
a. When caused by circumstances outside
GENERAL RULE: The warranty of
the control of the ship captain or ship
seaworthiness is complied with if the
owner;