XI.Fire InsuranceA. Definition and Scope of Fire InsuranceSEC. 169. As used in this Code, the termfire insuranceshall 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.

B. Risk or Losses covered (refer to reviewer)C. Effect of Alteration in the thing insuredSEC. 170. An alteration in the use or condition of a thing insured from that to which it is limited by the policy made without the consent of the insurer, by means within the control of the insured, and increasing the risks, entitles an insurer to rescind a contract of fire insurance.SEC. 171. An alteration in the use or condition of a thing insured from that to which it is limited by the policy, which does not increase the risk, does not affect a contract of fire insurance.D. Read Sec. 172, RA 10607SEC. 172. A contract of fire insurance is not affected by any act of the insured subsequent to the execution of the policy, which does not violate its provisions, even though it increases the risk and is the cause of the loss.

E. Measure of IndemnitySEC. 173. If there is no valuation in the policy, the measure of indemnity in an insurance against fire is the expense it would be to the insured at the time of the commencement of the fire to replace the thing lost or injured in the condition in which it was at the time of the injury; but if there is a valuation in a policy of fire insurance, the effect shall be the same as in a policy of marine insurance.SEC. 174. Whenever the insured desires to have a valuation named in his policy, insuring any building or structure against fire, he may require such building or structure to be examined by an independent appraiser and the value of the insureds interest therein may then be fixed as between the insurer and the insured. The cost of such examination shall be paid for by the insured. A clause shall be inserted in such policy stating substantially that the value of the insureds interest in such building or structure has been thus fixed. In the absence of any change increasing the risk without the consent of the insurer or of fraud on the part of the insured, then in case of a total loss under such policy, the whole amount so insured upon the insureds interest in such building or structure, as stated in the policy upon which the insurers have received a premium, shall be paid, and in case of a partial loss the full amount of the partial loss shall be so paid, and in case there are two (2) or more policies covering the insureds interest therein, each policy shall contributepro ratato the payment of such whole or partial loss. But in no case shall the insurer be required to pay more than the amount thus stated in such policy. This section shall not prevent the parties from stipulating in such policies concerning the repairing, rebuilding or replacing of buildings or structures wholly or partially damaged or destroyed.F. Co-insurance Clause (refer to reviewer)

G. Prohibitions SEC. 175. No policy of fire insurance shall be pledged, hypothecated, or transferred to any person, firm or company who acts as agent for or otherwise represents the issuing company, and any such pledge, hypothecation, or transfer hereafter made shall be void and of no effect insofar as it may affect other creditors of the insured.

CASE:Malayan Insurance Co. vs. PAP Co., GR 200784, August 7, 2013

Facts:On May 13, 1996, Malayan Insurance Company (Malayan) issued Fire Insurance Policy for the latters machineries and equipment located at Sanyo Precision Phils. Bldg., Phase III, Lot 4, Block 15, PEZA, Rosario, Cavite (Sanyo Building). The insurance, which was for 15,000,000.00 and effective for a period of one (1) year, was procured by PAP Co. for Rizal Commercial Banking Corporation (RCBC), the mortgagee of the insured machineries and equipment. After the passage of almost a year but prior to the expiration of the insurance coverage,

PAP Co. renewed the policy on an as is basis. On October 12, 1997 and during the subsistence of the renewal policy, the insured machineries and equipment were totally lost by fire. Hence, PAP Co. filed a fire insurance claim with Malayan in the amount insured. Malayan denied the claim upon the ground that, at the time of the loss, the insured machineries and equipment were transferred by PAP Co. to a location different from that indicated in the policy.

Issue:Whether or not Malayan is liable for the loss of the insured properties of PAP Co. under the fire insurance policy?

Held:It can be said that with the transfer of the location of the subject properties, without notice and without Malayans consent, after the renewal of the policy, PAP clearly committed concealment, misrepresentation and a breach of a material warranty. Section 26 of the Insurance Code provides: Section 26. A neglect to communicate that which a party knows and ought to communicate, is called a concealment. Under Section 27 of the Insurance Code, a concealment entitles the injured party to rescind a contract of insurance.

Accordingly, an insurer can exercise its right to rescind an insurance contract when the following conditions are present, to wit: 1) The policy limits the use or condition of the thing insured; 2) There is an alteration in said use or condition; 3) The alteration is without the consent of the insurer; 4) The alteration is made by means within the insured's control; and 5) The alteration increases the risk of loss. In the case at bench, all these circumstances are present. It was clearly established that the renewal policy stipulated that the insured properties were located at the Sanyo factory; that PAP removed the properties without the consent of Malayan; and that the alteration of the location increased the risk of loss. Thus, petitioner Malayan Insurance Company, Inc. is hereby declared NOT liable for the loss of the insured machineries and equipment suffered by PAP Co., Ltd.

XII.Casualty InsuranceA. ConceptSEC. 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, employers 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.

B. Kinds of Casualty Insurance (refer to reviewer)C. Theft and Robbery Insurance (refer to reviewer)D. Personal Accident and Health Insurance (refer to reviewer)

CASES:

Sun Insurance Office Ltd. vs. CA, July 17, 1992Facts:Lim accidentally killed himself with his gun after removing the magazine, showing off, pointing the gun at his secretary, and pointing the gun at his temple. The widow, the beneficiary, sued the petitioner and won 200,000 as indemnity with additional amounts for other damages and attorneys fees. This was sustained in the Court of Appeals then sent to the Supreme court by the insurance company.

Issue:1. Was Lims widow eligible to receive the benefits?2. Were the other damages valid?

Held:1. Yes 2. No

Ratio: 1. There was an accident.De la Cruz v. Capital Insurance says that "there is no accident when a deliberate act is performed unless some additional, unexpected, independent and unforeseen happening occurs which produces or brings about their injury or death." This was true when he fired the gun.

Under the insurance contract, the company wasnt liable for bodily injury caused by attempted suicide or by one needlessly exposing himself to danger except to save anothers life.

Lim wasnt thought to needlessly expose himself to danger due to the witness testimony that he took steps to ensure that the gun wasnt loaded. He even assured his secretary that the gun was loaded.

There is nothing in the policy that relieves the insurer of the responsibility to pay the indemnity agreed upon if the insured is shown to have contributed to his own accident.2. In order that a person may be made liable to the payment of moral damages, the law requires that his act be wrongful. The adverse result of an action does not per se make the act wrongful and subject the act or to the payment of moral damages. The law could not have meant to impose a penalty on the right to litigate; such right is so precious that moral damages may not be charged on those who may exercise it erroneously. For these the law taxes costs.

If a party wins, he cannot, as a rule, recover attorney's fees and litigation expenses, since it is not the fact of winning alone that entitles him to recover such damages of the exceptional circumstances enumerated in Art. 2208. Otherwise, every time a defendant wins, automatically the plaintiff must pay attorney's fees thereby putting a premium on the right to litigate which should not be so. For those expenses, the law deems the award of costs as sufficient.

Finman General Assurance vs. CA, Sept. 2, 1992

FACTS: On October 22, 1986, deceased, Carlie Surposa was insured with petitioner Finman General Assurance Corporation with his parents, spouses Julia and Carlos Surposa, and brothers Christopher, Charles, Chester and Clifton, all surnamed, Surposa, as beneficiaries. While said insurance policy was in full force and effect, the insured, Carlie Surposa, died on October 18, 1988 as a result of a stab wound inflicted by one of the three (3) unidentified men. Private respondent and the other beneficiaries of said insurance policy filed a written notice of claim with the petitioner insurance company which denied said claim contending that murder and assault are not within the scope of the coverage of the insurance policy. Private respondent filed a complaint with the Insurance Commission which rendered a favorable response for the respondent. The appellate court ruled likewise. Petitioner filed this petition alleging grave abuse of discretion on the part of the appellate court in applying the principle of "expresso unius exclusio alterius" in a personal accident insurance policy, since death resulting from murder and/or assault are impliedly excluded in said insurance policy considering that the cause of death of the insured was not accidental but rather a deliberate and intentional act of the assailant. Therefore, said death was committed with deliberate intent which, by the very nature of a personal accident insurance policy, cannot be indemnified. ISSUE: Whether or not the insurer is liable for the payment of the insurance premiums. HELD: Yes, the insurer is still liable. Contracts of insurance are to be construed liberally in favor of the insured and strictly against the insurer. Thus ambiguity in the words of an insurance contract should be interpreted in favor of its beneficiary. The terms "accident" and "accidental" as used in insurance contracts have not acquired any technical meaning, and are construed by the courts in their ordinary and common acceptation. Thus, the terms have been taken to mean that which happen by chance or fortuitously, without intention and design, and which is unexpected, unusual, and unforeseen. Where the death or injury is not the natural or probable result of the insured's voluntary act, or if something unforeseen occurs in the doing of the act which produces the injury, the resulting death is within the protection of the policies insuring against death or injury from accident. In the case at bar, it cannot be pretended that Carlie Surposa died in the course of an assault or murder as a result of his voluntary act considering the very nature of these crimes. Neither can it be said that where was a capricious desire on the part of the accused to expose his life to danger considering that he was just going home after attending a festival. Furthermore, the personal accident insurance policy involved herein specifically enumerated only ten (10) circumstances wherein no liability attaches to petitioner insurance company for any injury, disability or loss suffered by the insured as a result of any of the stimulated causes. The principle of " expresso unius exclusio alterius" the mention of one thing implies the exclusion of another thing is therefore applicable in the instant case since murder and assault, not having been expressly included in the enumeration of the circumstances that would negate liability in said insurance policy cannot be considered by implication to discharge the petitioner insurance company from liability for, any injury, disability or loss suffered by the insured. Thus, the failure of the petitioner insurance company to include death resulting from murder or assault among the prohibited risks leads inevitably to the conclusion that it did not intend to limit or exempt itself from liability for such death.

Biagtan vs. Insular Life Assurance, 44 SCRA 58

FACTS:Juan Biagtan was insured with Insular for P5k and a supplementary contract Accidental Death Benefit clause for another P5k if "the death of the Insured resulted directly from bodily injury effected solely through external and violent means sustained in an accident . . . and independently of all other causes." The clause, however, expressly provided that it would not apply where death resulted from an injury "intentionally inflicted by a third party."

One night, a band of robbers entered their house. Juan went out of his room and he was met with 9 knife stabs. He died. The robbers were convicted of robbery with homicide.

The family was claiming the additional P5k from Insular under the Accidental Death Benefit clause. Insular refused on the ground that the death resulted from injuries intentionally inflicted by 3rd parties and was therefore not covered.

Biagtans filed against Insular. CFI ruled in favor of Biagtans.

ISSUES:WON the injuries were intentionally inflicted by a third party?

HELD:Yes.

RATIONALEWhether the robbers had the intent to kill or merely to scare the victim or to ward off any defense he might offer, it cannot be denied that the act itself of inflicting the injuries was intentional.

The exception in the accidental benefit clause invoked by the appellant does not speak of the purpose whether homicidal or not of a third party in causing the injuries, but only of the fact that such injuries have been "intentionally" inflicted this obviously to distinguish them from injuries which, although received at the hands of a third party, are purely accidental.

Examples of unintentional: >> a gun which discharges while being cleaned and kills a bystander; >> a hunter who shoots at his prey and hits a person instead; >> an athlete in a competitive game involving physical effort who collides with an opponent and fatally injures him as a result.

In Calanoc vs. CA: Where a shot was fired and it turned out afterwards that the watchman was hit in the abdomen, the wound causing his death, the Court held that it could not be said that the killing was intentional for there was the possibility that the malefactor had fired the shot to scare the people around for his own protection and not necessarily to kill or hit the victim. A similar possibility is clearly ruled out by the facts in this case. For while a single shot fired from a distance, and by a person who was not even seen aiming at the victim, could indeed have been fired without intent to kill or injure, nine wounds inflicted with bladed weapons at close range cannot conceivably be considered as innocent insofar as such intent is concerned.

In Hucthcraft's Ex'r vs. Travelers' Ins. Co. (US case): where the insured was waylaid and assassinated for the purpose of robbery, the court rendered judgment for the insurance company and held that while the assassination of the insured was as to him an unforeseen event and therefore accidental, "the clause of the proviso that excludes the (insurer's) liability, in case death or injury is intentionally inflicted by any other person, applies to this case."

E. Glass Insurance (refer to reviewer)F. Employers Liability Insurance (refer to reviewer)G. Motor Vehicle Liability Insurance (refer to reviewer)H. Compulsory Motor Vehicle Liability InsuranceSEC. 386. For purposes of this chapter:(a)Motor Vehicleis any vehicle as defined in Section 3, paragraph (a) of Republic Act No. 4136, otherwise known as the Land Transportation and Traffic Code.(b)Passengeris any fare paying person being transported and conveyed in and by a motor vehicle for transportation of passengers for compensation, including persons expressly authorized by law or by the vehicles operator or his agents to ride without fare.(c)Thirdpartyis any person other than a passenger as defined in this section and shall also exclude a member of the household, or a member of the family within the second degree of consanguinity or affinity, of a motor vehicle owner or land transportation operator, as likewise defined herein, or his employee in respect of death, bodily injury, or damage to property arising out of and in the course of employment.(d)Ownerormotor vehicle ownermeans the actual legal owner of a motor vehicle, in whose name such vehicle is duly registered with the Land Transportation Office;(e)Land transportation operatormeans the owner or owners of motor vehicles for transportation of passengers for compensation, including school buses.(f)Insurance policyorPolicyrefers 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.SEC. 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.SEC. 388. The Commissioner shall furnish the Land Transportation Office with a list of insurance companies authorized to issue the policy of insurance or surety bond required by this chapter.SEC. 389. The Land Transportation Office shall not allow the registration or renewal of registration of any motor vehicle without first requiring from the land transportation operator or motor vehicle owner concerned the presentation and filing of a substantiating documentation in a form approved by the Commissioner evidencing that the policy of insurance or guaranty in cash or surety bond required by this chapter is in effect.SEC. 390. Every land transportation operator and every owner of a motor vehicle shall, before applying for the registration or renewal of registration of any motor vehicle, at his option, either secure an insurance policy or surety bond issued by any insurance company authorized by the Commissioner or make a cash deposit in such amount as herein required as limit of liability for purposes specified in Section 387.(a) In the case of a land transportation operator, the insurance guaranty in cash or surety bond shall cover liability for death or bodily injuries of third-parties and/or passengers arising out of the use of such vehicle in the amount not less than Twelve thousand pesos (P12,000.00) per passenger or third-party and an amount, for each of such categories, in any one accident of not less than that set forth in the following scale:(1) Motor vehicles with an authorized capacity of twenty-six (26) or more passengers: Fifty thousand pesos (P50,000.00);(2) Motor vehicles with an authorized capacity of from twelve (12) to twenty-five (25) passengers: Forty thousand pesos (P40,000.00);(3) Motor vehicles with an authorized capacity of from six (6) to eleven (11) passengers: Thirty thousand pesos (P30,000.00);(4) Motor vehicles with an authorized capacity of five (5) or less passengers: Five thousand pesos (P5,000.00) multiplied by the authorized capacity.Provided, however,That such cash deposit made to, or surety bond posted with, the Commissioner shall be resorted to by him in cases of accidents the indemnities for which to third-parties and/or passengers are not settled accordingly by the land transportation operator and, in that event, the said cash deposit shall be replenished or such surety bond shall be restored within sixty (60) days after impairment or expiry, as the case may be, by such land transportation operator, otherwise, he shall secure the insurance policy required by this chapter. The aforesaid cash deposit may be invested by the Commissioner in readily marketable government bonds, and/or securities.(b) In the case of an owner of a motor vehicle, the insurance or guaranty in cash or surety bond shall cover liability for death or injury to third-parties in an amount not less than that set forth in the following scale in any one accident:(1) Private Cars(i) Bantam: Twenty thousand pesos (P20,000.00);(ii) Light: Twenty thousand pesos (P20,000.00); and(iii) Heavy: Thirty thousand pesos (P30,000.00).(2) Other Private Vehicles(i) Tricycles, motorcycles and scooters: Twelve thousand pesos (P12,000.00);(ii) Vehicles with an unladen weight of 2,600 kilos or less: Twenty thousand pesos (P20,000.00);(iii) Vehicles with an unladen weight of between 2,601 kilos and 3,930 kilos: Thirty thousand pesos (P30,000.00); and(iv) Vehicles with an unladen weight over 3,930 kilos: Fifty thousand pesos (P50,000.00).The Commissioner may, if warranted, set forth schedule of indemnities for the payment of claims for death or bodily injuries with the coverages set forth herein.SEC. 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:Provided, That for purposes of this section:(a) The total indemnity in respect of any person shall not be less than Fifteen thousand pesos (P15,000.00);(b) The following proofs of loss, when submitted under oath, shall be sufficient evidence to substantiate the claim:(1) Police report of accident; and(2) Death certificate and evidence sufficient to establish the proper payee; or(3) Medical report and evidence of medical or hospital disbursement in respect of which refund is claimed;(c) Claim may be made against one motor vehicle only. In the case of an occupant of a vehicle, claim, shall lie against the insurer of the vehicle in which the occupant is riding, mounting or dismounting from. In any other case, claim shall lie against the insurer of the directly offending vehicle. In all cases, the right of the party paying the claim to recover against the owner of the vehicle responsible for the accident shall be maintained.SEC. 392. No land transportation operator or owner of motor vehicle shall be unreasonably denied the policy of insurance or surety bond required by this chapter by the insurance companies authorized to issue the same, otherwise, the Land Transportation Office shall require from said land transportation operator or owner of the vehicle, in lieu of a policy of insurance or surety bond, a certificate that a cash deposit has been made with the Commissioner in such amount required as limits of indemnity in Section 390 to answer for the passenger and/or third-party liability of such land transportation operator or owner of the vehicle.No insurance company may issue the policy of insurance or surety bond required under this chapter unless so authorized under existing laws.The authority to engage in the casualty and/or surety lines of business of an insurance company that refuses to issue or renew, without just cause, the insurance policy or surety bond therein required shall be withdrawn immediately.SEC. 393. No cancellation of the policy shall be valid unless written notice thereof is given to the land transportation operator or owner of the vehicle and to the Land Transportation Office at least fifteen (15) days prior to the intended effective date thereof. Upon receipt of such notice, the Land Transportation Office, unless it receives evidence of a new valid insurance or guaranty in cash or surety bond as prescribed in this chapter, or an endorsement of revival of the cancelled one, shall order the immediate confiscation of the plates of the motor vehicle covered by such cancelled policy. The same may be reissued only upon presentation of a new insurance policy or that a guaranty in cash or surety bond has been made or posted with the Commissioner and which meets the requirements of this chapter, or an endorsement or revival of the cancelled one.SEC. 394. If the cancellation of the policy or surety bond is contemplated by the land transportation operator or owner of the vehicle, he shall, before the policy or surety bond ceases to be effective, secure a similar policy of insurance or surety bond to replace the policy or surety bond to be cancelled or make a cash deposit in sufficient amount with the Commissioner, and without any gap, file the required documentation with the Land Transportation Office, and notify the insurance company concerned of the cancellation of its policy or surety bond.SEC. 395. In case of change of owner ship of a motor vehicle, or change of the engine of an insured vehicle, there shall be no need of issuing a new policy until the next date of registration or renewal of registration of such vehicle, and:Provided, That the insurance company shall agree to continue the policy, such change of ownership or such change of the engine shall be indicated in a corresponding endorsement by the insurance company concerned, and a signed duplicate of such endorsement shall, within a reasonable time, be filed with the Land Transportation Office.SEC. 396. In the settlement and payment of claims, the indemnity shall not be availed of by any accident victim or claimant as an instrument of enrichment by reason of an accident, but as an assistance or restitution insofar as can fairly be ascertained.SEC. 397. Any person having any claim upon the policy issued pursuant to this chapter shall, without any unnecessary delay, present to the insurance company concerned a written notice of claim setting forth the nature, extent and duration of the injuries sustained as certified by a duly licensed physician. Notice of claim must be filed within six (6) months from the date of accident, otherwise, the claim shall be deemed waived. Action or suit for recovery of damage due to loss or injury must be brought, in proper cases, with the Commissioner or the courts within one (1) year from denial of the claim, otherwise, the claimants right of action shall prescribe.SEC. 398. The insurance company concerned shall forthwith ascertain the truth and extent of the claim and make payment within five (5) working days after reaching an agreement. If no agreement is reached, the insurance company shall pay only the no-fault indemnity provided in Section 391 without prejudice to the claimant from pursuing his claim further, in which case, he shall not be required or compelled by the insurance company to execute any quit claim or document releasing it from liability under the policy of insurance or surety bond issued.In case of any dispute in the enforcement of the provisions of any policy issued pursuant to this chapter, the adjudication of such dispute shall be within the original and exclusive jurisdiction of the Commissioner, subject to the limitations provided in Section 439.SEC. 399. It shall be unlawful for a land transportation operator or owner of motor vehicle to require his or its drivers or other employees to contribute in the payment of premiums.SEC. 400. No government office or agency having the duty of implementing the provisions of this chapter nor any official or employee thereof shall act as agent in procuring the insurance policy or surety bond provided for herein. The commission of an agent procuring the said policy or bond shall in no case exceed ten percent (10%) of the amount of the premiums therefor.SEC. 401. Any land transportation operator or owner of motor vehicle or any other person violating any of the provisions of the preceding sections shall be punished by a fine of not less than Five hundred pesos (P500.00) and/or imprisonment for not more than six (6) months. The violation of Section 390 by a land transportation operator shall be a sufficient cause for the revocation of the certificate of public convenience issued by the Land Transportation Franchising and Regulatory Board covering the vehicle concerned.SEC. 402. Whenever any violation of the provisions of this chapter is committed by a corporation or association, or by a government office or entity, the executive officer or officers of said corporation, association or government office or entity who shall have knowingly permitted, or failed to prevent, said violation shall be held liable as principals.1. Third Party Liability Insurance RequirementSEC. 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. SEC. 389. The Land Transportation Office shall not allow the registration or renewal of registration of any motor vehicle without first requiring from the land transportation operator or motor vehicle owner concerned the presentation and filing of a substantiating documentation in a form approved by the Commissioner evidencing that the policy of insurance or guaranty in cash or surety bond required by this chapter is in effect.2. Third Party DefinedSEC. 386. For purposes of this chapter: (c)Thirdpartyis any person other than a passenger as defined in this section and shall also exclude a member of the household, or a member of the family within the second degree of consanguinity or affinity, of a motor vehicle owner or land transportation operator, as likewise defined herein, or his employee in respect of death, bodily injury, or damage to property arising out of and in the course of employment.3. Amount of IndemnitySEC. 390. Every land transportation operator and every owner of a motor vehicle shall, before applying for the registration or renewal of registration of any motor vehicle, at his option, either secure an insurance policy or surety bond issued by any insurance company authorized by the Commissioner or make a cash deposit in such amount as herein required as limit of liability for purposes specified in Section 387.(a) In the case of a land transportation operator, the insurance guaranty in cash or surety bond shall cover liability for death or bodily injuries of third-parties and/or passengers arising out of the use of such vehicle in the amount not less than Twelve thousand pesos (P12,000.00) per passenger or third-party and an amount, for each of such categories, in any one accident of not less than that set forth in the following scale:(1) Motor vehicles with an authorized capacity of twenty-six (26) or more passengers: Fifty thousand pesos (P50,000.00);(2) Motor vehicles with an authorized capacity of from twelve (12) to twenty-five (25) passengers: Forty thousand pesos (P40,000.00);(3) Motor vehicles with an authorized capacity of from six (6) to eleven (11) passengers: Thirty thousand pesos (P30,000.00);(4) Motor vehicles with an authorized capacity of five (5) or less passengers: Five thousand pesos (P5,000.00) multiplied by the authorized capacity.Provided, however,That such cash deposit made to, or surety bond posted with, the Commissioner shall be resorted to by him in cases of accidents the indemnities for which to third-parties and/or passengers are not settled accordingly by the land transportation operator and, in that event, the said cash deposit shall be replenished or such surety bond shall be restored within sixty (60) days after impairment or expiry, as the case may be, by such land transportation operator, otherwise, he shall secure the insurance policy required by this chapter. The aforesaid cash deposit may be invested by the Commissioner in readily marketable government bonds, and/or securities.(b) In the case of an owner of a motor vehicle, the insurance or guaranty in cash or surety bond shall cover liability for death or injury to third-parties in an amount not less than that set forth in the following scale in any one accident:(1) Private Cars(i) Bantam: Twenty thousand pesos (P20,000.00);(ii) Light: Twenty thousand pesos (P20,000.00); and(iii) Heavy: Thirty thousand pesos (P30,000.00).(2) Other Private Vehicles(i) Tricycles, motorcycles and scooters: Twelve thousand pesos (P12,000.00);(ii) Vehicles with an unladen weight of 2,600 kilos or less: Twenty thousand pesos (P20,000.00);(iii) Vehicles with an unladen weight of between 2,601 kilos and 3,930 kilos: Thirty thousand pesos (P30,000.00); and(iv) Vehicles with an unladen weight over 3,930 kilos: Fifty thousand pesos (P50,000.00).The Commissioner may, if warranted, set forth schedule of indemnities for the payment of claims for death or bodily injuries with the coverages set forth herein.4. No Fault IndemnitySEC. 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:Provided, That for purposes of this section:(a) The total indemnity in respect of any person shall not be less than Fifteen thousand pesos (P15,000.00);(b) The following proofs of loss, when submitted under oath, shall be sufficient evidence to substantiate the claim:(1) Police report of accident; and(2) Death certificate and evidence sufficient to establish the proper payee; or(3) Medical report and evidence of medical or hospital disbursement in respect of which refund is claimed;(c) Claim may be made against one motor vehicle only. In the case of an occupant of a vehicle, claim, shall lie against the insurer of the vehicle in which the occupant is riding, mounting or dismounting from. In any other case, claim shall lie against the insurer of the directly offending vehicle. In all cases, the right of the party paying the claim to recover against the owner of the vehicle responsible for the accident shall be maintained.5. Change of OwnershipSEC. 395. In case of change of owner ship of a motor vehicle, or change of the engine of an insured vehicle, there shall be no need of issuing a new policy until the next date of registration or renewal of registration of such vehicle, and: Provided, That the insurance company shall agree to continue the policy, such change of ownership or such change of the engine shall be indicated in a corresponding endorsement by the insurance company concerned, and a signed duplicate of such endorsement shall, within a reasonable time, be filed with the Land Transportation Office.

6. Notice of Claim/Prescription of ActionSEC. 397. Any person having any claim upon the policy issued pursuant to this chapter shall, without any unnecessary delay, present to the insurance company concerned a written notice of claim setting forth the nature, extent and duration of the injuries sustained as certified by a duly licensed physician. Notice of claim must be filed within six (6) months from the date of accident, otherwise, the claim shall be deemed waived. Action or suit for recovery of damage due to loss or injury must be brought, in proper cases, with the Commissioner or the courts within one (1) year from denial of the claim, otherwise, the claimants right of action shall prescribe.

7. Direct Liability of Insurer to Third Party (refer to reviewer)8. Authorized Driver Clause (whether voluntary or compulsory motor vehicle insurance) (refer to reviewer)9. Theft Clause (refer to reviewer)

CASE:Paramount Insurance vs. Spouses Remonduelaz, GR 173773, Nov. 28, 2012

FACTS:On May 26, 1994, respondents insured with petitioner their 1994 Toyota Corolla sedan under a comprehensive motor vehicle insurance policy for one year. During the effectivity of said insurance, respondents car was unlawfully taken. Respondents alleged that a certain Ricardo Sales (Sales) took possession of the subject vehicle to add accessories and improvements thereon, however, Sales failed to return the subject vehicle within the agreed three-day period. Then, respondents notified petitioner to claim for the reimbursement of their lost vehicle. However, petitioner refused to pay. Accordingly, respondents lodged a complaint for a sum of money against petitioner before the Regional Trial Court of Makati City but dismissed the complaint filed by respondents. Not in conformity with the trial courts Order, respondents filed an appeal to the Court of Appeals and in its decision the appellate court reversed and set aside the Order issued by the trial court. Petitioner, thereafter, filed a motion for reconsideration against said Decision, but the same was denied by the appellate court. Hence this Petition for Review on Certiorari.

ISSUE:Whether or not Paramount Insurance Corporation is liable under the insurance policy for the loss of respondents vehicle. RULING:The Supreme Court DENIED the motion of Paramount Insurance Company and AFFIRMED the Decision of the Court of Appeals entirely. Paramount Insurance Corporation is liable under the insurance policy. In People v. Bustinera, 8 this Court had the occasion to interpret the "theft clause" of an insurance policy. In this case, the Court explained that when one takes the motor vehicle of another without the latters consent even if the motor vehicle is later returned, there is theft there being intent to gain as the use of the thing unlawfully taken constitutes gain. Also, in Malayan Insurance Co., Inc. v. Court of Appeals, 9 this Court held that the taking of a vehicle by another person without the permission or authority from the owner thereof is sufficient to place it within the ambit of the word theft as contemplated in the policy, and is therefore, compensable. Records would show that respondents entrusted possession of their vehicle only to the extent that Sales will introduce repairs and improvements thereon, and not to permanently deprive them of possession thereof. Since, Theft can also be committed through misappropriation, the fact that Sales failed to return the subject vehicle to respondents constitutes Qualified Theft. Hence, since respondents car is undeniably covered by a Comprehensive Motor Vehicle Insurance Policy that allows for recovery in cases of theft, petitioner is liable under the policy for the loss of respondents vehicle under the "theft clause."

I. Insurable Interest in Liability Insurance (refer to reviewer)J. Meaning of Accident and Accidental in Casualty Insurance (refer to reviewer)K. Basis and Extent of Insurers Liability (refer to reviewer)

Ma. Jean B. CastaedaPage 9