a. NO. Double insurance exists where the same person is insured by several insurers separately, in respect to the same subject and interest. In the case at hand, the insurance was acquired separately by X and CCC Bank. There is therefore no double insurance as contemplated upon by law. (Sec. 93, Insurance Code)
b. YES. Double insurance is not prohibited unless there is a stipulation to the contrary. A person may therefore procure two or more insurances to cover his property. However, double insurance may lead to over insurance which is prohibited by law.
c. YES. The insurable interest of X, as a mortgagor, and CCC Bank, as a mortgagee, are separate and distinct from each other. Therefore, they may insure the property to the extent that they may be damnified by a contemplated peril. As such, X and CCC Bank may separately claim for the insurance proceeds that they obtained from the property insured to the extent of their insurable interest thereon.
a. YES. The businessman, as owner, and the creditor, as mortgagee, have separate insurable interests in the same stocks-in- trade. Each may insure such interest to protect his own separate interest.
b. As judge, I would allow the businessman to recover his total loss of P5M pesos representing the full value of his goods which were lost through fire. As to the creditor, I would allow him to recover the amount to the extent of or equivalent to the value of the credit he extended to the businessman for the stocks-in-trade which were mortgaged by the businessman.
c. The contention of First Insurance that double insurance is contrary to law is untenable. There is no law providing that double insurance is illegal per se. Moreover, in the problem at hand, there is no double insurance because the insured with the First Insurance is different from the insured with the Second Insurance Company. The same is true with respect to the interests insured in the two policies.
a. Armando can receive P5M from Second Insurance Company. As mortgagee, he had an insurable interest in the building. Armando cannot collect anything from First Insurance Company. First Insurance Company is not liable for the loss of the building. First, it was due to a willful act of Mario, who committed arson. Second, fire insurance policies contain a warranty that the insured will not store hazardous materials within the insured’s premises. Mario breached this warranty when he stored inflammable materials in the building. These two factors exonerate First Insurance Company from liability to Armando as mortgagee even though it was Mario who committed them.
b. Since Armando would have collected P5M from Second Insurance Company, this amount should be considered as partial payment of the loan. Armando can only collect the balance of P5M. Second Insurance Company can recover from Mario the amount of P5M it paid, because it became subrogated to the rights of Armando.
As a general rule, the insurance policy is not valid and binding, unless the premium thereof has been paid. This is the cash-and-carry rule under the Insurance Code. Premium is the consideration for the undertaking of the insurer to indemnify the insured against a specified peril. There are exceptions, however, one of them is, when there is an agreement allowing the insured to pay the premium in installments and partial payment has been made at the time of the loss. (Makati Tuscany Condominium Corporation v. Court of Appeals, G.R. No. 95546, November 6, 1992)
YES. SPMC is entitled to recover for the loss from Stable Insurance Company. Stable Insurance Company granted a credit term to pay the premiums. This is not against the law, because the standing business practice of allowing SPMC to pay the premiums after 60 or 90 days, was relied upon in good faith by SPMC. Stable Insurance Company is in estoppel. (UCPB General Insurance Company, Inc. v. Masagana Telemart, Inc., 356 SCRA 307, 2001)
a. NO. By approving the application of Quirco who disclosed that he was already 80 years old, ALAC waived the age requirement. ALAC is now estopped from raising such defense of age of the insured.
b. YES. The issuance of a cover note resulted in the perfection of the contract of insurance. In that case, it is only because there is delay in the issuance of the policy that the cover note was issued.
The cover note is a receipt whereby the company agrees to insure the insured for 60 days pending the issuance of a regular policy. No separate premium is to be paid on a cover note. It is not a separate policy but is integrated in the regular policy to be subsequently issued.
YES. As a general rule, no policy is binding unless the premiums thereof have been paid. However, one of the exceptions is when there is an agreement allowing the insured to pay the premium in installments and partial payment has been made at the time of loss. In the case at hand Francis already paid two installments at the time of the loss and as such may recover on the policy. (Makati Tuscany Condominium Corp. v. CA, G.R. No. 95546, Nov. 6, 1992)
Furthermore, the contention of the insurer that the failure to pay premium resulted in the cancellation of the policy is not tenable since no policy of insurance shall be cancelled except upon notice thereof to the insured. (Sec. 64, Insurance Code)
A mutual insurance company is a cooperative enterprise where the members are both the insurer and the insured. In it, the members all contribute, by a system of premiums or assessments, to the creation of a fund from which all losses and liabilities are paid, and where the profits are divided among themselves, in proportion of their interest.
a. YES, Alfredo may recover on the policy. It is valid to stipulate that the insured will be granted credit term for the payment of premium. Payment by means of a check which was accepted by the insurer, bearing a date prior to the loss, would be sufficient. The subsequent effects of encashment retroact to the date of the check.
b. YES, recovery under the insurance contract is allowed if the cause of the loss was either the proximate or the immediate cause as long as an excepted peril, if any, was not the proximate cause of the loss.
c. YES, mere negligence on the part of the insured will not prevent recovery under the insurance policy. The law merely prevents recovery when the cause of loss is the willful act of the insured, alone or in connivance with others.
NO. The insurer is not liable under the insurance policy. Under Art 1249 of the Civil Code, the delivery of a check produces the effect of payment only when it is encashed. The loss occurred on April 5, 2010. When the check was deposited, it was returned on April 10, 2010, for insufficiency of funds. The check was honored only after Enrique deposited additional funds with the bank. Hence, it did not produce the effect of payment.
