Quiz 8 Questions

Question 1

Discussion:

Question 2

G.R. No. 147839
1) In property insurance, what is the basis for a claim/damage?

Answer 2

Unlike the civil law concept of res perit domino, where ownership is the basis for consideration of who bears the risk of loss, in property insurance, one’s interest is not determined by concept of title, but whether insured has substantial economic interest in the property.

Question 3

G.R. No. 147839
2) What is the basis for an insurable interest?

Answer 3

Section 13 of our Insurance Code defines insurable interest as “every interest in property, whether real or personal, or any relation thereto, or liability in respect thereof, of such nature that a contemplated peril might directly damnify the insured.” Parenthetically, under Section 14 of the same Code, an insurable interest in property may consist in: (a) an existing interest; (b) an inchoate interest founded on existing interest; or (c) an expectancy, coupled with an existing interest in that out of which the expectancy arises.

Question 4

G.R. No. 147839
3) Why was petitioner still held liable even if the loss was due to a fortuitous event?

Answer 4

Under Article 1263 of the Civil Code, “[i]n an obligation to deliver a generic thing, the loss or destruction of anything of the same kind does not extinguish the obligation.” If the obligation is generic in the sense that the object thereof is designated merely by its class or genus without any particular designation or physical segregation from all others of the same class, the loss or destruction of anything of the same kind even without the debtor’s fault and before he has incurred in delay will not have the effect of extinguishing the obligation. This rule is based on the principle that the genus of a thing can never perish. Genus nunquan perit. An obligation to pay money is generic; therefore, it is not excused by fortuitous loss of any specific property of the debtor.

Question 5

G.R. No. 156167
4) What is an insurable contract?

Answer 5

Section 2(1) of the Insurance Code defines a contract of insurance as an agreement
whereby one undertakes for a consideration to indemnify another against loss,
damage, or liability arising from an unknown or contingent event.

Question 6

G.R. No. 156167
5) What are the elements of an insurance contract?

Answer 6

An insurance contract exists where the following elements concur:

1. The insured has an insurable interest;
2. The insured is subject to a risk of loss by the happening of the designated peril;
3. The insurer assumes the risk;
4. Such assumption of risk is part of a general scheme to distribute actual losses among a large group of persons bearing a similar risk; and
5. In consideration of the insurer’s promise, the insured pays a premium.

Question 7

G.R. No. 156167
6) In this case, what are the two (2) main reasons why the insurer is not liable to the whole claim?

Answer 7

There are three (3) main reasons why the insurer is not liable to the whole claim.

1) There is no ambiguity in the terms of the contract and its riders.

2) Petitioner cannot claim it did not know of the provisions of the policy, since in its inception, it told the insurance writer to copy verbatim the provisions of the latest insurance.

3) Although variance was presence in the recently created contract policy versus the past insurance contract policy, the principal provisions of the policy still remain essentially similar.

Question 8

Notes:

Money claim/pecuniary claim cannot be extinguished.