Title 8 - Premium
Title 8 - Premium
Title 8 - Premium
ASSESSMENT
- a sum specifically levied by mutual insurance
companies or associations, upon a fixed and definite plan,
to pay losses and expenses.
No policy issued by an insurance company is valid and binding until actual payment of
premium. Any agreement to the contrary is void. (Sec.77)
1. In case of life or industrial life insurance, when the grace periods applies (Sect. 77);
2. Whenever under the broker and agency agreements with duly licensed intermediaries, a
ninety (90)-day credit extension is given (Sect. 78);
3. When the insurer makes a written acknowledgment of the receipt premium; (Sec. 79);
CASE: Capital Insurance & Surety CO., Inc. v Plastic Era Co., Inc., 65 SCRA 134
(a) To the whole premium if no part of his interest in the thing insured be exposed to any
of the perils insured against;
If a peril insured against has existed, and the insurer has been liable for any period, however
short, the insured is not entitled to return of premiums, so far as that particular risk concerned.
A person insured is entitled to a return of the premium when the contract is voidable, and
subsequently annulled under the provisions of the Civil Code, or on account of the fraud or
misrepresentation of the insurer, or of his agent, or on account of facts, the existence of which
the insured was ignorant of without his fault; or when by any default of the insured other than
actual fraud, the insurer never incurred any liability under the policy.
A person insured is not entitled to a return of premium if the policy is annulled, rescinded or if
a claims is denied by reason of fraud.
In case of an over insurance by several insurers other than life, the insured is entitled to a
ratable return of the premium, proportioned to the amount by which the aggregate sum insured
in all the policies exceeds the insurable value of the thing at risk.
• The insurer is not liable for the total amount of insurance taken, his liability is limited to the
amount of the insurable interest on the property insured.
• The premiums to be returned shall be proportional to the amount by which the aggregate
sum insured in all the policies exceeds the insurable value of the thing at risk.
1. When no part of the thing insured has been exposed to any perils insured against (Sec.80,
a);
2. When the contract is voidable and subsequently annulled because of the fraud or
misrepresentations of the insurer or his agent (Sec. 82);
3. When the contract is voidable because of the existence of facts of which the insured was
ignorant without his fault (Sec. 82);
4. When the insurer never incurred any liability under the policy because of the default of the
insured other than actual fraud
1. When the insurance is for a definite period and the insured surrenders his policy before
the termination thereof (Sec.80,b);
• Where loss occurs before effective date, the insured is entitled to a return of the whole premium.
• After declaration of war between belligerent states where parties are subjects of, premiums paid
shall be returned to the insured.
• If the risk has never attached, the insurer cannot claim or retain the premium paid, in the absence
of any fraud or fault on the part of the insured.
An insurer may contract and accept payments, in addition to regular premium, for the purpose
of paying future premiums on the policy or to increase the benefits thereof.