Insurance

Concealment
Concealment is a neglect to communicate that which a party knows
and ought to communicate. (Sec. 26)
Requisites:
1. party knows a !act (a material !act) which he neglects to
communicate or disclose to the other party"
2. Such party concealing is duty #ound to disclose such !act to the
other"
$. Such party concealing makes no warranty as to the !act concealed
and"
%. &he other party has no means o! ascertaining the !act concealed.
'. &he !act must #e material
Material Concealment
(atters that must #e disclosed e)en in the a#sence o! inquiry:
1. &hose material to the contract
2. &hose which the other has no means o! ascertaining
$. &hose as to which the party with the duty to
communicate makes no warranty
"It is well settled that the insured need not die of the disease he failed
to disclose to the insurer. It is sufficient that his nondisclosure misled
the insurer in forming his estimate of the risks of the proposed
insurance policy or in making inquiries.
Incontestability Clause
&he insurer has two years !rom the date o! issuance o! the insurance
contract or o! its last reinstatement within which to contest the policy*
whether or not* the insured still li)es within such period. !ter two years*
the de!enses o! concealment or misrepresentation* no matter how patent
or well !ounded* no longer lie.
Requisites:
1. +t must #e a ,i!e insurance policy-
2. +t must #e .aya#le on the death o! the insured" and
$. +t must #e in !orce during the li!e time o! the insured !or at least
2 years !rom its date o! issue or o! its last reinstatement.
&he period o! two years may #e shortened #ut it cannot #e
e/tended #y stipulation.
Insurable Interest : Life vs. Property Insurance
Life Insurance:
1. +t is a contract o! in)estment .
2. lways regarded as )alued policy
$. (ay #e trans!erred or assigned to any person e)en i! he has no
insura#le interest.
%. &he consent o! the insurer is not essential to the )alidity o! the
assignment o! a li!e policy unless e/pressly required.
'. +nsura#le interest in the li!e or health o! the person insured need
not e/ist a!ter the insurance takes e!!ect or when loss occurs.
6. +nsura#le interest need not ha)e any legal #asis.
0. Contingency that is contemplated is a certain e)ent* the only
uncertainty #eing the time when it will take place.
1. &he lia#ility o! the insurer to make payment is certain* the only
uncertain element #eing when such payment must #e made.
2. (ay #e terminated #y the insured #ut cannot #e cancelled #y the
insurer and is usually a long term contract.
13. &he 4loss5 to the #ene!iciary caused #y the death o! the
insured can seldom #e measured accurately in terms o! cash
)alue.
11. &he #ene!iciary is under no o#ligation to pro)e actual
!inancial loss as a result o! the death o! the insured in order to
collect the insurance.
Property Insurance
1. +t is a contract o! indemnity.
2. (ay #e open or )alued.
$. &he trans!eree or assignee must ha)e an insura#le interest in the
thing insured.
%. Consent* in the a#sence o! wai)er #y the insurer* is essential in
the assignment o! the policy
'. +nsura#le interest in the property insured must e/ist not only
when the insurance takes e!!ect #ut also when the loss occurs.
6. +nsura#le interest must ha)e a legal #asis
0. &he contingency insured against may or may not occur.
1. ,ia#ility is uncertain #ecause the happening o! the peril insured
against is uncertain
2. (ay #e cancelled #y either party and is usually !or a term o! one
year
13. &he re)erse is generally true o! the loss o! property* i.e.* it is
capa#le o! pecuniary estimation
11. &he insured is required to su#mit proo! o! his actual pecuniary
loss as a condition precedent to collecting the insurance.
Double Insurance
6ou#le insurance e/ists where the same person is insured #y se)eral
insurers separately* in respect to the same su#7ect and interest. (Sec. 93)
Requisites:
1. .erson insured is the same
2. &wo or more insurers insuring separately
$. Su#7ect matter is the same
%. +nterest insured is the same
'. Risk or peril insured against is the same
Accident vs. Suicide
Accident
&hat which happens #y chance or !ortuitously* without intention or
design which is une/pected* unusual and un!oreseen.
Suicide
8ill!ul e/posure to needless peril which are e/cepted risk. +t is
intentional and implies the e/ercise o! reasoning !aculties* consciousness and
)olition.
+nsurer lia#le in case o! suicide:
1. &he suicide is committed a!ter the policy has #een in !orce !or a
period o! 2 years !rom the date o! its issue or o! its last
reinstatement.
. &he suicide is committed a!ter a shorter period pro)ided in the
policy although within the 2 year period
3. &he suicide is committed in the state o! insanity regardless o!
the date o! commission* unless suicide is an e/cepted risk. (Sec.
1!"#)
&he insurer is not lia#le i! it can show that the policy was o#tained with the
intention to commit suicide e)en in the a#sence o! any suicide e/clusion in
the policy.
Irrevocable Beneficiary
person who insures his own li!e may designate his #ene!iciary
re)oca#le or irre)oca#ly. 9or the designation to #e irre)oca#le* the insured
should e/pressly state the irre)oca#le designation in the policy itsel! (Sec.
11* +nsurance Code).
+! the designation o! the #ene!iciary is irrevocable, +nsured cannot:
1. ssign the policy
2. &ake the cash surrender )alue o! the policy
$. llow his creditors to attach or e/ecute on the policy"
%. dd new #ene!iciary" or
'. Change the irre)oca#le designation to re)oca#le* e)en though
the change is 7ust and reasona#le.
Public nemy
pu#lic enemy cannot #e insured. :y pu#lic enemy is meant any
citi;en or 7uridical entity o! the country with which the .hilippines may #e at
war.
Payment of Premium
!eneral "ule: <= insurance policy issued or renewal is )alid and
#inding until actual payment o! the premium. ny agreement to the
contrary is )oid >Sec. 00?.

#ceptions:
1. +n case o! li!e and industrial li!e whene)er the grace period pro)ision
applies.
2. 8here there is an acknowledgment in the contract or policy o!
insurance that the premium has already #een paid.
$. 8here there is an agreement to grant the insured credit e/tension
!or the payment o! the premium despite !ull awareness o! Sec. 00
%. 8here there is an agreement allowing the insured to pay premium
in installment and partial payment has #een made at the time o! the
loss.
'. 8here the parties are #arred #y estoppels.
Assi$nment of Policy in Life Insurance
+n those instances where the insured can assign his policy* his
assignee may #e any person* whether or not he (the assignee) has an
insura#le interest in the li!e o! the insured. li!e insurance is a property
right within the capacity o! its owner to dispose o!* like his other properties.
%&ird Party Liability
Claimants@ )ictims may #e a 4passenger5 or a 4$
rd
party5. &he insured
may #e the party at !ault as against claims o! third parties or the )ictim o!
the contingent e)ent.
&hird .artyA any person other than a passenger as de!ined in this
sections and shall also e/clude a mem#er o! the household* or a mem#er o!
the !amily within the second degree o! consanguinity or a!!inity* o! a motor
)ehicle owner or land transportation operator* as likewise de!ined herein* or
his employee in respect o! death* #odily in7ury* or damage to property
arising out o! and in the course o! employment. (Sec. $0$* >c?* +nsurance
Code)
Aut&ori'ed Driver Clause
+t indemni!ies the insured owner against loss or damage to the car #ut
limits the use o! the insured )ehicle to:
1. &he insured himsel!" or
2. ny person who dri)es on his order or with his permission.
Marine Insurance( Perils of t&e Sea v. Perils of t&e S&ip
Perils of t&e Sea, includes only those casualties due to the:
1. Bnusual )iolence" or
2. C/traordinary action o! wind and wa)e" or
$. =ther e/traordinary causes connected with na)igation.
Perils of t&e S&ip, a loss which in the ordinary course o! e)ents*
results !rom the:
1. <atural and ine)ita#le action o! the sea"
2. =rdinary wear and tear o! the ship" or
$. <egligent !ailure o! the shipDs owner to pro)ide the )essel with
proper equipment to con)ey the cargo under ordinary conditions.