Laws & Jurisprudence
CASUALTY INSURANCE
8:39 PM
Casualty
insurance
covers loss or liability arising from accident or mishap, excluding those
falling under types of insurance as fire
or marine. (Sec. 174)
The following are the two divisions of
casualty insurance :
1. Accident or
health insurance – Insurance against specified perils which may affect the person and/or property of the insured. E.g.
personal accident, robbery/theft
insurance
2. Third party
liability insurance – Insurance against specified perils
which may give rise to liability on the
part of the insured
of claims for
injuries or damage to property of others.
some rules on “third party liability
insurance”
1. Insurable interest
is based on the interest of the insured in the safety of the
persons, and their
property, who may maintain an action against him in case
of their injury
or destruction respectively.
2. In a third
party liability (TPL) insurance
contract, the insurer
assumes the obligation
by paying the
injured third party
to whom the
insured is liable.
Prior payment by
the insured to
the third person is not necessary
in order that the
obligation may arise.
The moment the insured becomes
liable to third persons, the insured
acquires an interest in the insurance
contract which may be garnished like any
other credit.
3. In burglary,
robbery and theft
insurance, the opportunity
to defraud the insurer (moral hazard) is so great
that insurer have found it necessary to
fill up the
policies with many
restrictions designed to
reduce the hazard. Persons frequently excluded are those
in the insured’s
service and employment.
The purpose of
the exception is
to guard against
liability should theft be committed
by one having
unrestricted access to
the property.
4. Right of
third party injured to sue the
insurer of party
at fault depends
on whether the
contract of insurance
is intended to benefit third
persons also or only the insured
Under these instances the injured person have the right to sue insurer of the party at fault:
1. Indemnity against third party liability – injured
third party can directly sue the
insurer. The purpose is to protect injured person against the insolvency of the insured who causes such injury.
2. Indemnity against actual
loss or payment – third party has no cause
of action against
the insurer. The
third person’s recourse
is limited to
the insured alone. The contract
is solely for the insurer to reimburse
the insured for liability actually
satisfied by him.
It must be noted that the insurer
is not solidarily
liable with the
insured. The insurer’s liability is based on contract; that of the insured is based on torts.
Furthermore, the insurer’s liability is
limited by the amount of the insurance
coverage.
Liability insurance is a contract of
indemnity for the benefit of the insured
and those in privity with him, or those
to whom the law upon the grounds of
public policy extends the indemnity
against liability.
Liability of the insurer and that of the
insured in case for indemnity against third person liability:
1. Insurer’s
liability is direct but the insurer
cannot be held
solidarily liable with
the insured and
other parties at fault. While
the liability of the insured is direct and can
be held liable with all the
parties at fault.
2. Insurer’s
liability is based
on contract. Whereas the
liability of the insured is based on tort.
3. Insurer’s
third‐party liability is only up to the extent of the insurance policy and
that required by
law. On the other hand, the liability of the insured extends to the amount of actual and other damages. (Heirs of George Y. Poe v. Malayan
Insurance Company, Inc. G.R. No. 156302, Apr. 7, 2009)
“no action” clause
It
is a requirement
in a policy
of liability insurance
which provides that
suit and final
judgment be first obtained against the insured, that
only thereafter can
the person injured
recover on the policy. (Guingon v. Del Monte, G.R. No. L‐21806, Aug. 17, 1967)
A
“no action” clause
must yield to
the provisions of
the Rules of
Court regarding multiplicity of suits. (Shafter v. RTC, G.R.
No. 78848, Nov. 14, 1988)
The author takes no responsibility for the validity, correctness and result of this work. The information provided is not a legal advice and it should not be used as a substitute for a competent legal advice from a licensed lawyer. See the disclaimer
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