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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE
- A contract of insurance is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event.
- The classes of insurance include: Life Insurance, Property Insurance, Casualty Insurance, Compulsory Insurance, and Microinsurance.
A contract of insurance is an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event. (Section 2, Republic Act No. 10607, also known as The Insurance Code)
Based from the foregoing, an insurance contract exists when the following elements concur:
- The insured has an insurable interest;
- The insured is subject to a risk of loss by the happening of the designated peril;
- The insurer assumes the risk;
- 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
- In consideration of the insurer’s promise, the insured pays a premium. (Gulf Resorts, Inc. v. Philippine Charter Insurance Corporation, G.R. No. 156167, May 16, 2005)
What may be insured?
The classes of insurance include: Life Insurance, Property Insurance, Casualty Insurance, Compulsory Insurance, and Microinsurance.
What is life insurance?
The law says:
Section 181. Life insurance is insurance on human lives and insurance appertaining thereto or connected therewith.
Every contract or undertaking for the payment of annuities including contracts for the payment of lump sums under a retirement program where a life insurance company manages or acts as a trustee for such retirement program shall be considered a life insurance contract for purposes of this Code. (Section 181, R.A. No. 10607)
An insurance upon life may be made payable on the death of the person, or on his surviving a specified period, or otherwise contingently on the continuance or cessation of life. (Section 182, R.A. No. 10607)
What falls under property insurance? Property insurance includes Fire Insurance, Marine Insurance, and Suretyship.
What is fire insurance?
The law says:
Section 169. As used in this Code, the term fire insurance shall include insurance against loss by fire, lightning, windstorm, tornado or earthquake and other allied risks, when such risks are covered by extension to fire insurance policies or under separate policies. (Section 169, R.A. No. 10607)
What does marine insurance include?
The law says:
Section 101. Marine Insurance includes:
(a) Insurance against loss of or damage to:
(1) Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, securities, choses in action, instruments of debts, valuable papers, bottomry, and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit or transportation, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting shipment, or during any delays, storage, transhipment, or reshipment incident thereto, including war risks, marine builder’s risks, and all personal property floater risks;
(2) Person or property in connection with or appertaining to a marine, inland marine, transit or transportation insurance, including liability for loss of or damage arising out of or in connection with the construction, repair, operation, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to any person arising out of ownership, maintenance, or use of automobiles);
(3) Precious stones, jewels, jewelry, precious metals, whether in course of transportation or otherwise; and
(4) Bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage); piers, wharves, docks and slips, and other aids to navigation and transportation, including dry docks and marine railways, dams and appurtenant facilities for the control of waterways.
(b) Marine protection and indemnity insurance, meaning insurance against, or against legal liability of the insured for loss, damage, or expense incident to ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft or instrumentality in use of ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person. (Section 101, R.A. No. 10607)
What is casualty insurance?
The law says:
Section 176. Casualty insurance is insurance covering loss or liability arising from accident or mishap, excluding certain types of loss which by law or custom are considered as falling exclusively within the scope of other types of insurance such as fire or marine. It includes, but is not limited to, employer’s liability insurance, motor vehicle liability insurance, plate glass insurance, burglary and theft insurance, personal accident and health insurance as written by non-life insurance companies, and other substantially similar kinds of insurance. (Section 176, R.A. No. 10607)
What are the classifications of compulsory insurance?
Compulsory insurance is classified as Compulsory Motor Vehicle Liability Insurance and Compulsory Insurance for Agency-Hired Migrant Workers.
A Compulsory Motor Vehicle Liability Insurance refers to a contract of insurance against passenger and third-party liability for death or bodily injuries and damage to property arising from motor vehicle accidents. (Section 386(f), R.A. No. 10607)
A Compulsory Insurance for Agency-Hired Migrant Workers is, in addition to the performance bond to be filed by the recruitment/manning agency under Section 10, each migrant worker deployed by a recruitment/manning agency shall be covered by a compulsory insurance policy which shall be secured at no cost to the said worker. (Section 37-A, R.A. No. 11022, Migrant Workers and Overseas Filipinos Act)
What is Microinsurance?
The law says:
Microinsurance is an activity providing specific insurance, insurance-like and other similar products and services that meet the needs of the low-income sector for risk protection and relief against distress, misfortune, and other contingent events. (Insurance Memorandum Circular No. 001-10, January 20, 2010)
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