QuestionsQuestions (Act No. 2427)
Insurance is a contract whereby one undertakes for a consideration (the premium) to indemnify another against loss, damage, or liability arising from an unknown or contingent event.
Any contingent or unknown event, whether past or future, which may damage a person having an insurable interest or create liability against him, may be insured subject to the Act.
Because Sec. 4 expressly does not authorize insurance for or against the drawing of any lottery or for or against any chance or ticket in a lottery drawing a prize (void as contrary to the Act).
The person who undertakes to indemnify another by a contract of insurance is the insurer, and the person indemnified is called the insured.
Only persons, companies, corporations, or associations that hold a certificate of authority from the Insurance Commissioner may be insurers.
Anyone except a public enemy may be insured.
A person has insurable interest in the life and health of: (a) himself; (b) any person on whom he depends wholly or in part for education or support; (c) any person under a legal obligation to him for payment of money or relating to property/services where death or illness might delay or prevent performance; and (d) any person upon whose life an estate or interest vested in him depends.
Insurable interest exists where the nature of the interest (or relation/liability in respect thereof) is such that a contemplated peril might directly damage the insured. The measure is the extent to which the insured might be damnified by loss or injury of the insured property (Sec. 16).
The sole object of insurance is indemnity of the insured; if he has no insurable interest, the contract is void.
Concealment is a neglect to communicate that which a party knows and ought to communicate. Under Sec. 26, whether intentional or unintentional, concealment entitles the injured party to rescind the contract.
Materiality is determined not by the event but solely by the probable and reasonable influence of the facts on the party to whom communication is due, in forming his estimate of disadvantages of the proposed contract or in making inquiries.
A representation is false when facts fail to correspond with its assertions or stipulations. If false in a material point (affirmative or promissory), the injured party may rescind from the time the representation becomes false (Sec. 44).
It must specify: (a) parties; (b) amount insured (except open/running policies); (c) premium rate; (d) property or life insured; (e) the insured’s interest in property if not absolute owner; (f) risks insured against; and (g) period the insurance continues.
A change in use or condition from that limited by the policy, made without insurer’s consent, by means within control of the insured, that increases the risk entitles the insurer to rescind the fire insurance contract.
No. If the alteration does not increase the risk, it does not affect the fire insurance contract.
Marine insurance is 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.
There is an implied warranty that the ship is seaworthy, meaning reasonably fit to perform the services and encounter ordinary perils of the contemplated voyage. It is complied with if the ship is seaworthy at the commencement of the risk; with special timing rules if insurance is for a specified time or on cargo that is transshipped at intermediate ports.