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INSURANCE > Finals Insurance > Flashcards

Finals Insurance Flashcards

1
Q

Pertains to the provision where the beneficiary may be forfeited from the share in the profit

A

Section 12. The interest of a beneficiary in a life insurance policy shall be forfeited when the beneficiary is the principal, accomplice, or accessory in willfully bringing about the death of the insured. In such a case, the share forfeited shall pass on to the other beneficiaries, unless otherwise disqualified. In the absence of other beneficiaries, the proceeds shall be paid in accordance with the policy contract. If the policy contract is silent, the proceeds shall be paid to the estate of the insured.

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2
Q

Consideration in a contract of insurance on the part of the insured

A

Indemnification

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3
Q

Provision in which there’s a need of insurable interest at the time of the insurance

A

Section 19. An interest in PROPERTY insured must exist when the insurance TAKES EFFECT, and when the LOSS OCCURS, but need not exist in the meantime;

and interest in the LIFE OR HEALTH of a person insured must exist when the insurance TAKES EFFECT, but NEED NOT exist thereafter or WHEN LOSS OCCURS .

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4
Q

In an authorized driver clause, the insurer is not liable if the one that is driving is the ____

A

other than the insured

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5
Q

If it is an all risk policy marine insurance, both perils are covered, peril of navigation and _____

A

perils of a ship

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6
Q

Generally, expressed warranty are present and applicable in all insurance because implied warranty are not allowed in those insurance, what kind of insurance in which implied warranty is allowed?

A

Marine Insurance

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7
Q

__ is a kind of policy wherein the amount stated is the insurer’s maximum liability

A

OPEN POLICY

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8
Q

How much is the claimable amount of a third person in a no-fault clause

A

15K

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9
Q

In marine insurance, how do you call the income derived from leasing of the ship from the shipowner

A

freightage

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10
Q

In fire insurance, your insurer is liable if the cause of loss is what kind of fire?

A

Hostile Fire

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11
Q

__ provides for the option on the part of insured to cancel the policy

A

“Section 80. A person insured is entitled to a return of premium, as follows:

“(a) To the whole premium if no part of his interest in the thing insured be exposed to any of the perils insured against;

“(b) Where the insurance is made for a definite period of time and the insured surrenders his policy, to such portion of the premium as corresponds with the unexpired time, at a pro rata rate, unless a short period rate has been agreed upon and appears on the face of the policy, after deducting from the whole premium any claim for loss or damage under the policy which has previously accrued: Provided, That no holder of a life insurance policy may avail himself of the privileges of this paragraph without sufficient cause as otherwise provided by law.

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12
Q

In case there is suicide committed by the insured, in what specific period is your insurer not liable

A

within the 2 yr period

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13
Q

If your insurer is adjudged to be liable for unreasonably refusing to pay the proceeds to your insured or beneficiary, your insurer is liable for the amount of the proceeds + attorney’s fees + the cost of suit + ____

A

twice the legal interest

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14
Q

If the basis of liability of the one at fault in casualty insurance is Quasi delict or tort, what is the basis for the liability of the insurer?

A

contract of insurance

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15
Q

If the beneficiary in life insurance is irrevocable, this can only be revoked by what provision of law

A

FAMILY CODE

Art. 64. After the finality of the decree of legal separation, the innocent spouse may revoke the donations made by him or by her in favor of the offending spouse, as well as the designation of the latter as beneficiary in any insurance policy, even if such designation be stipulated as irrevocable. The revocation of the donations shall be recorded in the registries of property in the places where the properties are located. Alienations, liens and encumbrances registered in good faith before the recording of the complaint for revocation in the registries of property shall be respected. The revocation of or change in the designation of the insurance beneficiary shall take effect upon written notification thereof to the insured.

The action to revoke the donation under this Article must be brought within five years from the time the decree of legal separation become final. (107a)

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16
Q

A person is disqualified from being beneficiary if he falls under Art 79 of the civil code in relation to what provision?

A

CIV CODE Article 2012. Any person who is forbidden from receiving any donation under article 739 cannot be named beneficiary of a life insurance policy by the person who cannot make any donation to him, according to said article. (n)

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17
Q

It refers to the act of salvaging cargoes at the expense of the cargoes for the common benefit of all

A

Jettison

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18
Q

The liability of the insurer’s of the ship or cargo that were not saved pertains to what?

A

Particular Average

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19
Q

If sending of notice and proof loss, pertains to conditions subsequent, what is the other kind of condition?

A

Condition precedent

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19
Q

was completely repealed by PD 612 (Insu Code)

A

RA 10607

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20
Q

Incontestability clause is found under what provision

A

“Section 48. Whenever a right to rescind a contract of insurance is given to the insurer by any provision of this chapter, such right must be exercised previous to the commencement of an action on the contract.

“After a policy of life insurance made payable on the death of the insured shall have been in force during the lifetime of the insured for a period of two (2) years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent.

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20
Q

Collateral inducement that an insurer can use to disapprove an insurance

A

Representation

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21
Q

also known as loss payable mortgage clause

A

Open mortgage clause

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22
Q

pertains to a kind of insurance wherein the proceeds should not be 5x more than the minimum wage

A

Industrial Life Insurance

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23
Q

In a property insurance wherein there is already the sending notice and proof of loss, your insurer should already make payment of your proceeds within a period of what?

A

30 days

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24
Q

In case the minor is the beneficiary in a life insurance of his father who is already dead, the following can assist her in getting insurance proceeds of not less than 200k, mother, grandparent, actual relative

A

Eldest sibling of legal age

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25
Q

In this kind of charter policy, the charterer is the disponent owner

A

Bareboat Charter

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26
Q

The test of materiality applies to your representation, the other kind of vice other than concealment

A

Section 46. The materiality of a representation is determined by the same rules as the materiality of a concealment.

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27
Q

is a kind of insurance that also includes investment

A

Variable Unit Linked Insurance (VUL)

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28
Q

Contract between the shipowner and the charter

A

Indemnity Agreement

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29
Q

Contract between the shipowner and the charter

A

Charter Party

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30
Q

Your shipowner is liable for what?

A

Abandonment

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31
Q

Loan entered into by the cargo owner making as collateral the cargoes

A

Respondentia Loan

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32
Q

Mortgage redemption insurance is what kind of insurance

A

Life insurance

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33
Q

Formula to get your co-insurance’s loss in fire insurance if there is a stipulation

A

(amt of insu / val of prop) x amt of loss= liability

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34
Q

provision that provides for the option of insurer to renew the policy

A

Section 66. In case of insurance other than life, unless the insurer at least forty-five (45) days in advance of the end of the policy period mails or delivers to the named insured at the address shown in the policy notice of its intention not to renew the policy or to condition its renewal upon reduction of limits or elimination of coverages, the named insured shall be entitled to renew the policy upon payment of the premium due on the effective date of the renewal. Any policy written for a term of less than one (1) year shall be considered as if written for a term of one (1) year. Any policy written for a term longer than one (1) year or any policy with no fixed expiration date shall be considered as if written for successive policy periods or terms of one (1) year.

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35
Q

Formula to get the liability in case of overinsurance and double insurance in life insurance

A

No formula since no overinsurance in Life Insu

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36
Q

There is an accident and there are 3 deaths and the vehicle is a PUV, how much is the total liability of your insurer

A

400,000….70k +30 k = 100k x 3

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37
Q

AUTHORIZED DRIVER CLAUSE

A

Typical provision in Motor Vehicle Liability Insurance

Insurer will be liable only if the driver is an authorized driver at the time of the accident

Ensures that the person driving the vehicle other than the insured owner is a duly licensed driver and has no disqualification to drive a motor vehicle

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38
Q

Authorized Driver Clause-
Collecting the insurance barred when:

A

a.When the driver is without license

b.When the driver’s license has already expired

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39
Q

ADC no license but insured:

A

If the one driving is the insured, he may still recover under the insurance even without a license or with an expired one

may however be liable under Motor Vehicle Law

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40
Q

MOTOR VEHICLE LIABILITY INSURANCE

A

 The insurer becomes liable for the damage or injury caused in the operation of motor vehicles

 Maybe voluntary or compulsory

 Covers death, incapacity or injury and damage to property

 Not limited to third party liability; may be comprehensive and cover damage or injury to the person or property of the insured himself or third persons

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41
Q

No Action Clause

A

disallows suit against the insurer unless final judgment is obtained by a third party against the insured.

If direct liability to third party is provided for, a “no action clause” cannot be provided in the policy

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42
Q

THEFT CLAUSE

A

 Makes theft of motor vehicle a risk insured against

 The taking of a vehicle by another person without the permission or authority from the owner is sufficient to place it within the ambit of the word theft

 Applies even if the person who took the vehicle is an employee of the insured; not covered by “malicious damage clause”

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43
Q

COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE (CMVLI)

A

Section 387. It shall be unlawful for any land transportation operator or owner of a motor vehicle to operate the same in the public highways unless there is in force in relation thereto a policy of insurance or guaranty in cash or surety bond issued in accordance with the provisions of this chapter to indemnify the death, bodily injury, and/or damage to property of a third-party or passenger, as the case may be, arising from the use thereof.

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44
Q

Death Indemnity

A

Death indemnity is P70,000; indemnity fro burial and funeral expenses is P30,000

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45
Q

NO FAULT INDEMNITY CLAUSE

A

Section 391. Any claim for death or injury to any passenger or third-party pursuant to the provisions of this chapter shall be paid without the necessity of proving fault or negligence of any kind:

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46
Q

What is CONCEALMENT

A

Section 26. A neglect to communicate that which a party knows and ought to communicate, is called a CONCEALMENT.

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47
Q

How is “correct estimation” achieved?

A

1) If all material information are disclosed; and

2) If the parties are certain that disclosed information can be relied upon.

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48
Q

How is “delimitation” achieved?

A

1) By specific description of the risk consisting of the designation of the specific person or property interest to be covered and the specification of the perils; or

2) By using exceptions.

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49
Q

How is “control” achieved?

A

1) Promissory warranties; and
2) Conditions;
a. This will prevent the occurrence of risks or hazards that may happen after the policy has been issued.

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50
Q

Kinds of Devices:

A

1) Concealment
2) Representation
3) Warranty
4) Condition
5) Exceptions

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51
Q

Requisites, rescission on the ground of concealment

A

a) The party involved must know the fact concealed or at least he ought to know the same

b) The fact concealed must be material

c) No warranty is extended by the party regarding the fact concealed

d) The other party does not have the means of ascertaining

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52
Q

When there is no material concealment

A

(a) Those which the other knows;

(b) Those which, in the exercise of ordinary care, the other ought to know, and of which the former has no reason to suppose him ignorant;

(c) Those of which the other waives communication;

(d) Those which prove or tend to prove the existence of a risk excluded by a warranty, and which are not otherwise material; and

(e) Those which relate to a risk excepted from the policy and which are not otherwise material.

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53
Q

 There is no material concealment that justifies the insurer or rescind the policy in the following cases:

A

a) When matters are known to the other party
b) When in the exercise of ordinary care, one party ought to know, and of which the other party has no reason to suppose him ignorant
c) When there is waiver of communication
d) When matters are those which prove or tend to prove the existence of a risk excluded by a warranty, and which are not otherwise material
e) When matters are those which relate to a risk excepted from the policy and which are not otherwise material
f) When the matter involves general causes that are open to inquiry of each party and which may affect the political or material perils contemplated
g) When the matter is included in general usages of trade
h) Information of the nature or amount of the insured property, is not disclosed unless in answer to an inquiry
i) When what is involved is information of the party’s own judgment upon the matters in question.
j) As long as they were made in good faith and without intent to deceive

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54
Q

what is REPRESENTATION

A

 are statements made to give information to the insurer to induce him to enter into the insurance contract; a collateral communication made to the other party in writing or by word of mouth

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55
Q

REMEDY: CONCEALMENT

A

 Rescission of the insurance contract (Sec 27)
 The right to rescind should be exercised previous to the commencement of an action on the contract

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56
Q

FOUR PRIMARY CONCERNS

A
  1. Correct estimation of the risk
  2. Delimitation of the risk
  3. Control of the risk
  4. Determining whether the loss
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57
Q

Concealment: OPINION (gr & xpns)

A

gr: no need to disclose

xpn: when insured intentionally states something untrue as av=belief even if it’s untrue (w/ is known by him)

xpn to xpn: when opinions are made in good faith even if they are untrue (Philamcare vs CA)

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58
Q

Concealment: Knowledge of insurer

A

if insurer knows contract is void but it still pushes thru= considered valid

59
Q

Concealment: when does rescission work?

A

both intentionally and unintentionally

60
Q

Concealment: Knowledge of the fact concealed

A

gr: Mistake , good faith and negligence will NOT excsue the insured from concealment coz unintentional non-disclosure still avoids the policy

xpn:
1. when it’s an opinion
2. insurer waives his right to the info

61
Q

REPRESENTATION

A

statements made to give information to the insurer to induce him to enter into the insurance contract;

62
Q

Repre: TIME

A

GR: ON OR B4 THE ISSUANCE OF THE POLICY

XPN: Representation may also be one that induces the party to agree to modify the contract.

63
Q

Concealment VS. Representation : SIMILARITIES

A
  1. Same test of materiality applies
  2. A party can rescind
64
Q

Concealment VS. Representation : DIFFERENCES

A

Conceal:

  • Involves an omission/ non- disclosure

Repre:
- Involves a positive assertion or affirmation

Conceal:
-Cannot refer to future acts

Repre:
-Can pertain to the future; itcan be promissory

65
Q

REPRE: Kinds

A
  1. FORM
  2. NATURE
66
Q

REPRE: Kinds of Forms

A
  1. oral
  2. written
67
Q

REPRE: Kinds of Nature Statements

A
  1. Affirmative representations- involve statements dealing with facts existing AT THE TIME the contract is made
  2. Promissory representations- pertain to statements made by the insured concerning WHAT IS TO HAPPEN at the time the insurance is already effective
68
Q

REPRE: Interpretation

A

Representations are construed liberally in favor of the insured and are required to be only substantially true

69
Q

the prescriptive period for risk insurance

A

10 yrs

70
Q

______ does not apply to life insurance even if insurer made payment already to the beneficiaries

A

Subrogation

71
Q

what provision provides for the Standard mortgage clause

A

Section 9 - Union Mortgage clause

“Section 9. If an insurer assents to the transfer of an insurance from a mortgagor to a mortgagee, and, at the time of his assent, imposes further obligations on the assignee, making a new contract with him, the acts of the mortgagor cannot affect the rights of said assignee.

72
Q

Your insurer is still liable even if the immediate cause is the peril insured against if your ___ is your excepted peril

A

Proximate cause

73
Q

Pertains to a contract entered into between your principal debtor and the surety in which your principal debtor should pay your surety for what ever payment made by the surety to the obligee….this is a contract entered into between your surety and principal debtor in which you principal debtor will make payment to your surety whatever your surety or whatever will be the amount paid by your surety to your obligee

A

Indeminity Agreement

74
Q

REPRE: Test of Materiality

A

 There is material representation if the knowledge of one party will affect the insurer’s action on his application, either by approving it with the corresponding adjustment for a higher premium or rejecting the same or in fixing the terms and conditions of the policy.

75
Q

REPRE: Remedy

A

RESCISSION OF THE CONTRACT

Section 45. If a representation is false in a material point, whether affirmative or promissory, the injured party is entitled to rescind the contract from the time when the representation becomes false.

76
Q

REPRE: Policy cannot be rescinded on the ground of false representation when

A
  1. There is waiver,
  2. An action has already been commenced on the contract, and
  3. The incontestable clause applies.
77
Q

what is a WARRANTY

A

An affirmation of fact or a promise that forms part of the terms and conditions of the policy; the untruth or nonfulfillment renders the policy voidable by the insurer

78
Q

WARRAN: kinds

A

Express warranty. Stated in the policy or any of its attachments

Implied warranty. A natural element of the contract imposed by law and is a part of the policy without the need that it be stated in the policy

Affirmative warranty. An affirmation of fact that exists at the time they are made; an undertaking that some positive allegation of fact is true

Promissory warranty. Stipulates that certain things shall be done or a specified condition shall exist during the currency of life of the insurance contract; one part is bound by an executory stipulation

79
Q

 “Other insurance” clause

A

The insured warrants that there is no existing insurance over the same property when the insurance policy takes effect

80
Q

WARRAN: BREACH

A

 Breach of warranty by the insured renders the contract defeasible. In order to avoid the policy, the insurer must prove such breach.

 Breach of an immaterial provision does not avoid the policy.

81
Q

WARRAN: Non-compliance with a warranty may be excused when

A
  1. By reason of change of circumstances, the warranty is no longer applicable to the circumstances of the contract
  2. When compliance with the warranty is rendered unlawful by any subsequent law
  3. Breach is waived by the other party
82
Q

WARRAN: REMEDY

A

Rescission of the insurance contract

Section 74. The violation of a material warranty, or other material provision of a policy, on the part of either party thereto, entitles the other to rescind.

83
Q

WARRANTY VS REPRESENTATION

A

WARRANTY:
1. Part of the contract
2. Written on a policy or its rider
3. Presumed to be material
4. There must be strict compliance

REPRESENTATION
1. Not part of the contract but a collateral inducement
2. Can be oral or in writing
3. Must be established to be material
4. It must be substantially true

84
Q

CONDITION

A

do not relate to the risk covered or statement of fact but are in the nature of collateral promises or stipulations; includes:

1.Promises of obligations regarding CLAIMS PROCEDURE that are NOT FUNDAMENTAL l to the validity of the contract, and

  1. CONDITIONS conferring more rights to the insurer ENLARGING OR REPEATING the minimum rights provided by law

Conditions may either be conditions precedent (e.g. payment of premium) or conditions subsequent (e.g. giving of notice of loss)

85
Q

EXCEPTION, EXCLUSIONS, OR EXEMPTION

A

insurer desires to limit or restrict the operation of the general provisions of its contract by special proviso, exception, or exemption, the policy should express such limitation in clear and unmistakable language.

86
Q

INCONTESTABLE CLAUSE

A

Section 48. Whenever a right to rescind a contract of insurance is given to the insurer by any provision of this chapter, such right must be EXERCISED PREVIOUS to the commencement of an action on the contract

After a policy of LIFE INSURANCE made payable on the death of the insured shall have been in force during the lifetime of the insured for a period of two (2) years from the date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured or his agent.

87
Q

Mandatory Incontestable Clauses

A

2 yrs from date of issue:

  1. Life or Endowment Policy [Section 233(b)]
  2. Group Life Insurance Policies [Section 234(b)]
  3. Industrial Life Policies [Section 236(b)]

incontestability period is one (1) year (health, pension and memorial):
4. For Term Insurance Coverage under Group Life Insurance Policy required to cover plan holders of Pre-Need Plans,

88
Q

Incontestability Clause is inapplicable/ cannot be invoked

A
  1. Non-payment of premium
  2. Violation of the conditions of the policy relating to military or naval services in times of war
  3. Property insurance
  4. Absence of insurable interest
  5. When vicious fraud was employed in obtaining the policy
  6. Where the cause of the loss is an excepted risk
  7. Where the beneficiary feloniously kills the insured
  8. The beneficiary failed to comply with conditions subsequent like failure to submit notice of loss
  9. If the claim is barred by extinctive prescription
89
Q
  1. WAR LIMITATION RIDER OR WAR CLAUSE
A

requires a provision that the incontestable clause does not apply if there is a violation of the condition of the policy relating to military or naval service in time of war

90
Q

DOUBLE INSURANCE

A

 Where two or more insurers issue separate insurance policies over the same subject and interest

91
Q

DOUBLE INSURANCE Requisites:

A
  1. The same person is insured; (several insurers)
  2. There are two or more insurers that insured the person separately; (interest)
  3. The insurance is over the same subject; (risk)
  4. The same interest is involved; and (same subject)
  5. The same peril is insured against. (same insured)
92
Q

Double insurance in life insurance

A

 There can be double insurance in life insurance but there can never be over-insurance

93
Q

DOUBLE INSURANCE : GR & XPNS

A

GR: taking other insurance coverage is not prohibited

XPN: Policy can be rescinded if two conditions are present

  1. Another insurance coverage is discovered
  2. Total insurance is in excess of the value of property insured
94
Q

Contract of indemnity

A

insured cannot recover more than what he lost, however it is only true with respect to property insurance.

95
Q

Over Insurance

A

Results when the insured insures the same property for an amount greater than the value of the property with the same insurance company

96
Q

REINSURANCE

A

Is presumed to be a contract of indemnity against liability, and not merely against damage.

97
Q

Original Insurance Contract VS Reinsurance Contract

A

The original insurance contract is separate and distinct from the reinsurance contract.

An original insurance contract covers indemnity against damages, while reinsurance covers indemnity against liability.

98
Q

MARINE INSURANCE

A

 A type of insurance that secures vessels and its cargoes against the perils of navigation.

99
Q

MAR_INCLUDES

A
  1. Insurance against loss of or damage to:
    -vessels/vehicle
    -person or property
    -precious stones
    -instrumentalities of transportation
  2. Marine protection and indemnity insurance
100
Q

MAR_ KINDS OF MAR. INSU

A
  1. Ocean Marine Insurance
  2. Inland Marine Insurance
  3. Aircraft Hull Policy (Aviation Insurance)
101
Q

MAR_OCEAN MARINE INSU

A

An insurance against risks connected with navigation, to which a ship, cargo, freightage, profits, or other insurable interest in movable property, may be exposed during a certain voyage or a fixed period of time

102
Q

OCEAN MARINE INSU_KINDS

A

a. Insurance over the vessel, craft and other conveyances

b. Insurance for the protection of the carrier against liability to others for loss or damage to the property of another

c. Insurance over cargoes that are being transported

d. Insurance over freightage and income.

e. Compulsory Passenger and Cargo Liability Insurance

103
Q

MARINA Rules: COMPULSORY INSU

A

a. Compulsory insurance of P200,000.00 for each passenger is imposed on shipowners/operators

b. Shipowner/operator is liable to pay the P200,000.00 if no insurance is obtained or if passenger is unmanifested

c. Maritime accident insurance of P50,000.00 for each survivor

104
Q

MARINA Rules: insu attaches

A
  1. from the time the passenger sets foot on the boarding gangway or ladder leading to the deck,
  2. continues during the entire course of the voyage covered by the passenger ticket or coupon
  3. until the passenger shall have left the disembarking gangway or ladder at the port of destination
105
Q

MARINA Rules: Claims Settlement

A

Insurance company shall pay any claim for death or bodily injury sustained by a manifest passenger without the necessity of proving fault or negligence on the part of the car carrier

106
Q

INLAND MARINE INSU

A

Covers the land or over the land transportation perils of property shipped by railroads, motor trucks, airplanes, and other means of transportation; also covers risks of lake, river or other inland waterway transportation and other waterborne perils outside those covered by ocean marine insurance

107
Q

AVIATION INSURANCE.

A

Cover all risks ground and flight; all damages both on the ground and in flight are included as well as insurance over the aircraft while the same is not in motion

108
Q

MAR_ALL RISK POLICY.

A

Insures against all conceivable causes of loss or damage during the voyage whether arising from marine peril or not, except:

  1. excluded in the policy, or
  2. one due to fraud or intentional misconduct on the part of the insured
109
Q

MAR_ NAMED PERILS POLICY

A

Insurance policy specified the perils insured against in a
Perils Clause

-PERILS OF THE SEA
-PERILS OF THE SHIP

110
Q

PERILS OF THE SEA

A

Includes only those casualties due to the:

  1. unusual violence; or
  2. extraordinary action of wind and wave; or
  3. Other extraordinary causes connected with navigation
111
Q

PERILS OF THE SHIP

A

A loss which in the ordinary course of events, results from the:
1. natural and inevitable action of the sea
2. ordinary wear and tear of the ship or
3. Negligent failure of the ship’s owner to provide the vessel with proper equipment to convey the cargo under ordinary
conditions.

112
Q

FIRE AND RELATED PERILS. (other perils)

A

Destroyed or damaged by fire and other losses due to hear, smoke, vessel or odor or from water, steam or chemicals

113
Q

JETTISON. (other perils)

A

Usually involved in “General Average” where the goods are thrown overboard to save other cargoes and/or the ship

114
Q

BARRATRY (other perils)

A

Act committed by the master or crew of the ship for some unlawful or fraudulent purpose contrary to their duty to the ship owner

115
Q

ASSAILING THIEVES (other perils)

A

Theft of cargo committed by force and does not include clandestine theft, pilferage, or theft by passengers of crew

116
Q

ALL OTHER LIKE PERILS (other perils)

A

Covering risks which are like kind (ejusdem generis) with the particular risks which were enumerated in the preceding part of the same clause of the contract

117
Q

who has INSURABLE INTEREST OVER THE SHIP?

A
  1. ship owner
  2. charterer
  3. lender on bottomry
  4. mortgagee
118
Q

LOAN ON BOTTOMRY.

A

The borrower (shipowner) will not be required to pay the loan if the vessel will not safely reach its destination - Ship

119
Q

RESPONDETIA LOAN

A

loan for collateral for cargoes

-repaid w/ interest when ship reaches its destination

  • no reach —> no repay
120
Q

INSURABLE INTEREST OVER CARGO

A
  1. SHIPOWNER. May be damnified by the loss of the goods under the contract of carriage
  2. SHIPPER as owner of the goods or seller has insurable interest
  3. CONSIGNEE (BUYER)- GOODS IN TRANSIT has insurable interest over the goods even if they are still no transfer of ownership while the goods are in transit
121
Q

INSURABLE INTEREST OVER FREIGHTAGE AND INCOME

A

a. SHIPOWNER. -Has insurable interest over the expected freightage, ( NO INTEREST IF PAID IN ADVANCE)

b. One who has interest in the thing from which PROFITS are expected to proceed has an insurable interest in the profits

122
Q

CONCEALMENT: marine insu vs orig insu

A

Marine:
1. Belief and expectations of third persons should be disclosed

  1. Insurer is exonerated only if the cause of loss is the risk concealed

Ordinary Insu:
1. Belief and expectations of third persons need not be disclosed

  1. GR: Insurer is always exonerated even if the matter concealed is not the cause of the loss
123
Q

MAR_ MATERIALITY

A

Marine Insurance: Representation is material if it will affect the decision of the insurer to take the risk or to fix the premium and other terms and conditions of the policy

124
Q

MAR_EXPECTATION

A

 Expectations of the insured are not material unless it will amount to a promissory representation

 A representation as to a matter of expectation or belief is true if it be made in good faith

Section 114. The eventual falsity of a representation as to expectation does not, in the absence of fraud, avoid a contract of marine insurance.

125
Q

MAR_ IMPLIED WARRANTIES

A

 Deemed part of the marine insurance contract even in the absence of contractual stipulations

126
Q

MAR_ IMPLIED WARRANTY _TYPE

A
  1. Warranty of Seaworthiness
  2. Warranty that the Ship has the Documents of Neutrality or Nationality

3.Warranty Against Improper Deviation

4.Warranty of Legality of the Voyage

127
Q

SEAWORTHINESS

A

SEAWORTHY if it is able to withstand the rigors of the voyage

 A finding that the vessel is unseaworthy precludes recovery from the insurer.

 The fact that unseaworthiness of the vessel is unknown to the insured is immaterial

128
Q

CARGOWORTHINESS

A

A ship which is seaworthy for the purpose of insurance upon the ship may be unseaworthy for the purpose of insurance upon the cargo.

 It is the obligation of the cargo owner to look for a reliable common carrier which keeps its vessels seaworthy

129
Q

SEAWORTHINESS: WAIVER

A

warranty of seaworthiness is waived if the insurer (still) paid the insured the value of the lost cargoes.

130
Q

SEAWORTHINESS: COMMENCEMENT

A

GR: It is only the COMMENCEMENT of the voyage IS IMPORTANT… If the ship become unseaworthy after the commencement of the voyage, there is no breach of warranty.

XPN: Section 120. When the ship becomes unseaworthy DURING the voyage to which an insurance relates, an unreasonable DELAY in REPAIRING the DEFECTS EXONERATES the insurer on ship or shipowner’s interest from liability from any loss arising therefrom.

131
Q

MAR_ROUTE

A

course can be determined by:

  1. agreed
  2. course fixed by mercantile usage
  3. w/c a master of ordinary skill/ discretion (most natural, direct & advantageous)
132
Q

MAR_DEVIATION

A
  1. A departure from the course of voyage insured
  2. An unreasonable delay in pursuing the voyage or the commencement of an entirely different voyage
133
Q

MAR_DEVIATION_PROPER WHEN:

A

Section 126.

(a) When caused by circumstances over which NEITHER the MASTER nor the owner of the ship HAS ANY CONTROL;

(b) WHEN NECESSARY to comply with a warranty, or to avoid a peril, whether or not the peril is insured against;

(c) When made in GOOD FAITH and upon reasonable grounds of belief in its necessity to AVOID A PERIL;

(d) When made in GOOD FAITH, for the PURPOSE OF SAVING HUMAN LIFE life or relieving another vessel in distress.

134
Q

MAR_LOSS_KINDS

A

a. Total Loss
1. Actual Loss.
2. Constructive Loss.- There Really Is No Total Loss

b. Partial Loss. Every Loss Which Is Not Total

135
Q

MAR_ACTUAL TOTAL LOSS

A

if the subject-matter is destroyed or so damaged as to ceased to be a thing of the kind insured or where the insured irretrievably deprived thereof

136
Q

MAR_CONSTRUCTIVE TOTAL LOSS

A

s where the thing insured has been reduced to such a state or place in such a position by the perils insured against as to make its total destruction or annihilation though not inevitable,though not utterly hopeless, yet exceedingly doubtful

137
Q

MAR_PRESUMED ACTUAL TOTAL LOSS.

A

Generally, the fact of actual total loss should be established by sufficient evidence

XPN: Section 134. An actual loss may be presumed from the continued absence of a ship without being heard of. The length of time which is sufficient to raise this presumption depends on the circumstances of the case.

138
Q

MAR_RESHIPMENT

A

If the goods are reshipped: the insurance over the goods continue when they are reshipped

139
Q

MAR_ABANDONMENT

A

Section 140. Abandonment, in marine insurance,…….. is the act of the insured by which, after a constructive total loss, he declares the relinquishment to the insurer of his interest in the thing insured.

140
Q

MAR_ABANDONMENT_REQ

A
  1. There must be an actual relinquishment by the person insured of his interest in the thing insured
  2. There must be constructive total loss (Sec 141)
  3. The abandonment be neither partial nor conditional (Sec 142)
    (INSURER GETS WHAT REMAINS OF THE VESSEL/CARGO)
  4. Made within reasonable time after receipt of reliable information of the loss (Sec 143)
  5. It must be factual (Sec 144)
  6. It must be made by giving notice thereof to the insurer which may be done orally or in writing (Sec 145)
  7. The notice of abandonment must be explicit and must specify the particular cause of the abandonment (Sec 146)
141
Q

MAR_EFFECTS OF ABANDONMENT

A

Abandonment transfers all the rights of the insured over the thing insured to the insurer. The insurer becomes the owner of what remains of the property that is the subject of the insurance

142
Q

MAR_ACCEPTANCE OF ABANDONMENT

A

If all the requisites are complied with for a valid abandonment, the insurer may not reject the abandonment

insured would still be entitled to compensation for total loss despite the refusal of the insurer to accept.

143
Q

MAR_REVOCATION

A

GR: Abandonment is generally irrevocable.

XPN: Abandonment can be revoked only when the ground proves to be unfounded, e.g., where there was in fact no constructive total loss

144
Q

MAR_EFFECT OF FAILURE TO ABANDON

A

a. No abandonment can be made if there is partial loss which is not considered constructive total loss.

b. If there is a constructive total loss but the insured failed or refused to abandon, the insurer shall be liable for the loss

145
Q

MAR_MEASURE OF INDEMNITY

A

The amount of indemnity in marine insurance is affected by the type of policy involved.

146
Q

MAR_VALUED POLICY

A

The valuation is conclusive upon the parties except when there is fraud when the valuation was fixed

147
Q
A

INSURANCE (2 decks)

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