MARINE INSURANCE includes

a. Insurance against loss of or damage to:

1. Vessel
- Covers all risks in the shipment or navigation of a vessel, including the goods
shipped, profits, and the ship itself.
- CHARTERER (lessee) has insurable interest with the freightage of the goods.
- Owner of the VESSEL has insurable interest with the vessel itself and the goods
- Owner of the GOODS has insurable interest with the goods themselves.
- INSURABLE:
o Any peril during the voyage
o Any peril for a certain period
o Ay peril for a certain voyage
- PERILS OF THE SHIP : ordinary wear and tear of the ship, ordinary occurrences in
the voyage
- PERILS OF THE SEA: unexpected and inevitable circumstances and casualties due
to the violence of the sea (INCH MARIE CLAUSE)
Implied warranty of sea worthiness ship is reasonably fit to perform service and must
be able to encounter the ordinary perils of the voyage. It is not limited to the physical
structure of the vessel, but must be laden with the proper equipment, machinery, crew
members, and food for passengers.
Implied warranties of the ship:
1. W. of seaworthiness
2. W. that the vessel will not deviate from the route
3. W. that the vessel will not engage in illegal papers
4. W. that the vessel has the proper documents
IN THE ABSENCE OF ANY STIPULATION, ONLY THE PERILS OF THE SEA IS INSURED,
UNLESS ALL-RISK POLICY IS STIPULATED.
ALL-RISK POLICY exempting clauses arte important; concealment will not vitiate the
contract except when such concealment is the cause of damage or loss.
BAREBOAT or DEMISE charter
- charterer: ship becomes common carrier
- the real owner: becomes private carrier, tasked to observe diligence of a good
father of a family
VOYAGE OR TIME CHARTER- AFREIGHTMENT
- the owner of the vessel is the common carrier (extraordinary diligence)
- shipper is a private carrier
INSURABLE INTEREST IN MARINE INSURANCE:
Shipper cargo, expected profits
Charterer the ship and the goods
Ship-owner the ship itself

RESPONSIBILITY OF THE SHIPPER - should look for a seaworthy ship

- INSURER should investigate first the seaworthiness of the ship before paying the
claimant.
CONCEALMENT IN MARINE INSURANCE
- opinion of 3rd persons are material and must be disclosed (example: Pag-asa
report, Engineer of the ship report on the machine of the ship)
- if due to concealment, there was loss or damage, that us the only time that the
insurer may rescind the contract
- CANNOT RESCIND contract with the following grounds:
o National character of the ship
o Falsified or simulated documents
o Illegal goods/contraband
GENERAL AVERAGE LOSS damages and expenses incurred for the salvation of the cargo
or ship from a real or known risk everybody benefits!
PARTICULAR AVERAGE LOSS damages and expenses incurred not for the common
benefit of all but only for particular or certain persons.
CONSTRUCTIVE TOTAL LOSS
if the owner of the vessel would spend more than of the value of the vessel to
save it, or if the injury reduced the value of the thing insured for more than .
the owner should abandon everything to the insurer, so the insurer would look for
something to salvage from it. The insurer will pay the value of the vessel.
Need to notify the insurer immediately, must be made within reasonable time after
receipt of reliable information of the loss
HOW
1.
2.
3.

ABANDONMENT IS MADE:
notice (generally in writing) to the insurer
notice should be made explicitly stating the cause of abandonment
if oral notice is made, there should be a written notice within 7 days from the oral
notice

VEHICLE INSURANCE
Comprehensive insurance for vehicles all risk insurance
No fault indemnity clause right to claim without proving fault or negligence; made on
the vehicle within which the injured is riding at the time of the accident; indemnity not
exceeding PhP 5,000; proof for claim medical cert, or death cert, or police report of the
accident.
3 party suit against insurer depends on the policy (sometimes, the person at fault pays
first, then the insurer pays afterwards)
Compulsory 3rd party liability - the purpose is to give financial assistance to victims of
motor vehicle accidents or their dependents

Compulsory motor vehicle liability insurance

- contract of insurance against liability for death or bodily injuries of passengers or
3rd parties arising from motor vehicle accidents
PROCESS UNDER COMPULSORY 3RD PARTY LIABILITY
1. File notice of claim within 6 months from date of accident. Include cert. of
physician.
2. Prescriptive period- action should be filed in:
a. Insurance commission less than Php 100,000 claim
b. RTC more that Php 100,000 claim
Within 1 year from denial of claim (with stipulation) or 10 years (without
stipulation)
3. If there is agreement, the insurer should make payment within 5 days of
Compulsory 3rd party liability;
4. If there is no agreement, insurer shall pay no fault indemnity without prejudice to
pursue claim further. The insurer has the right of subrogation to sue for recovery
against the vehicle at fault.
Authorized drivers clause driver should be duly licensed or with permission, even if the
license is fake.
- Expired license of the driver (not the insured himself) is not authorized driver.
Theft Clause if there is theft clause and the vehicle is unlawfully taken, insurer is liable
under the clause and authorized driver clause DOES NOT APPLY. Insured can recover
even if thief has no license.
OVER INSURANCE same property insured for greater value; insured is entitled to ratable
return of premium proportioned to the amount by which the aggregate sum insured
exceeds the insurable value of the thing at risk.
DOUBLE INSURANCE 2 or more insurance, same property, not exceeding value of
property
RE-INSURANCE taken by the original insurer to insure his liability

SETTLEMENT OF CLAIMS:
1. Notice of loss given within reasonable time: so that the insurer will have ample
time to investigate on the loss/ destruction/ death.
2. Notice of claim to the insurer should be given within 6 months after notice of loss.
Submission of evidence of loss.
3. Insurer should pay

a. NON-LIFE 30 days after proof of loss is received by the insurer, and the
loss/ damage has been ascertained through agreement or arbitration;
b. NON-LIFE 90 days after receipt of proof of loss, and the ascertainment had
not been made within 60 days after such receipt;
c. LIFE INSURANCE immediately upon maturity of policy (except when payable
in installments or as an annuity, they are payable as they become due);
d. LIFE INSURANCE - within 60 days from filing of proof of death.
DOUBLE INTEREST DOCTRINE The insurer must pay immediately upon maturity,
otherwise, the insurer pays:
(12% interest per annum x 2) of the principal + other damages at 6% per annum
WHEN DOES THE CAUSE OF ACTION ACCRUE?
- upon final denial of the claim
- MR filed in the insurance company does not affect the prescriptive period.
** When the insurer pays, there is the right of subrogation. The insurer steps into the
shoes of the insured. Need not be stipulated.
** Subrogation does not apply in:
- LIFE insurance
- or when the insurer released the wrong doer
- or when he pays for a risk which is not covered by the policy
- or when he pays more than the value of the insurance.