Chapter II

CLASSES OF INSURANCE
Title I
MARINE INSURANCE
Sub-Title 1- A
DEFINITION
Sec. 99. Marine Insurance includes:
(1) Insurance against loss of or damage to:
(a) Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, efects,
disbursements, ro!ts, mone"s, securities, choses in action, evidences of debts,
valuable aers, bottomr", and resondentia interests and all other #inds of roert"
and interests therein, in resect to, aertaining to or in connection $ith an" and all
ris#s or erils of navigation, transit or transortation, or $hile being assembled,
ac#ed, crated, baled, comressed or similarl" reared for shiment or $hile a$aiting
shiment, or during an" dela"s, storage, transhiment, or reshiment incident thereto,
including $ar ris#s, marine builder%s ris#s, and all ersonal roert" &oater ris#s'
(b) (erson or roert" in connection $ith or aertaining to a marine, inland marine,
transit or transortation insurance, including liabilit" for loss of or damage arising out
of or in connection $ith the construction, reair, oeration, maintenance or use of the
sub)ect matter of such insurance (but not including life insurance or suret" bonds nor
insurance against loss b" reason of bodil" in)ur" to an" erson arising out of
o$nershi, maintenance, or use of automobiles)'
(c) (recious stones, )e$els, )e$elr", recious metals, $hether in course of
transortation or other$ise'
(d) *ridges, tunnels and other instrumentalities of transortation and communication
(e+cluding buildings, their furniture and furnishings, !+ed contents and sulies held in
storage)' iers, $harves, doc#s and slis, and other aids to navigation and
transortation, including dr" doc#s and marine rail$a"s, dams and aurtenant
facilities for the control of $ater$a"s.
(,)-Marine rotection and indemnit" insurance,-meaning insurance against, or against
legal liabilit" of the insured for loss, damage, or e+ense incident to o$nershi,
oeration, chartering, maintenance, use, reair, or construction of an" vessel, craft or
instrumentalit" in use of ocean or inland $ater$a"s, including liabilit" of the insured
for ersonal in)ur", illness or death or for loss of or damage to the roert" of another
erson.
Sub-Title 1-B
INSURABLE INTEREST
Sec. 1... /he o$ner of a shi has in all cases an insurable interest in it, even $hen it
has been chartered b" one $ho covenants to a" him its value in case of loss: (rovided,
/hat in this case the insurer shall be liable for onl" that art of the loss $hich the
insured cannot recover from the charterer.
Sec. 1.1. /he insurable interest of the o$ner of the shi h"othecated b" bottomr" is
onl" the e+cess of its value over the amount secured b" bottomr".
Sec. 1.,. 0reightage, in the sense of a olic" of marine insurance, signi!es all the
bene!ts derived b" the o$ner, either from the chartering of the shi or its emlo"ment
for the carriage of his o$n goods or those of others.
Sec. 1.1. /he o$ner of a shi has an insurable interest in e+ected freightage $hich
according to the ordinar" and robable course of things he $ould have earned but for
the intervention of a eril insured against or other eril incident to the vo"age.
Sec. 1.2. /he interest mentioned in the last section e+ists, in case of a charter art",
$hen the shi has bro#en ground on the chartered vo"age. If a rice is to be aid for
the carriage of goods it e+ists $hen the" are actuall" on board, or there is some
contract for utting them on board, and both shi and goods are read" for the seci!ed
vo"age.
Sec. 1.3. 4ne $ho has an interest in the thing from $hich ro!ts are e+ected to
roceed has an insurable interest in the ro!ts.
Sec. 1.5. /he charterer of a shi has an insurable interest in it, to the e+tent that he is
liable to be damni!ed b" its loss.
Sub-Title 1-C
CONCEALMENT
Sec. 1.6. In marine insurance each art" is bound to communicate, in addition to $hat
is re7uired b" section t$ent"8eight, all the information $hich he ossesses, material to
the ris#, e+cet such as is mentioned in Section thirt", and to state the e+act and $hole
truth in relation to all matters that he reresents, or uon in7uir" discloses or assumes
to disclose.
Sec. 1.9. In marine insurance, information of the belief or e+ectation of a third erson,
in reference to a material fact, is material.
Sec. 1.9. : erson insured b" a contract of marine insurance is resumed to have
#no$ledge, at the time of insuring, of a rior loss, if the information might ossibl"
have reached him in the usual mode of transmission and at the usual rate of
communication.
Sec. 11.. : concealment in a marine insurance, in resect to an" of the follo$ing
matters, does not vitiate the entire contract, but merel" e+onerates the insurer from a
loss resulting from the ris# concealed:
(a) /he national character of the insured'
(b) /he liabilit" of the thing insured to cature and detention'
(c) /he liabilit" to sei;ure from breach of foreign la$s of trade'
(d) /he $ant of necessar" documents'
(e) /he use of false and simulated aers.
Sub-Title 1-D
REPRESENTATION
Sec. 111. If a reresentation b" a erson insured b" a contract of marine insurance, is
intentionall" false in an" material resect, or in resect of an" fact on $hich the
character and nature of the ris# deends, the insurer ma" rescind the entire contract.
Sec. 11,. /he eventual falsit" of a reresentation as to e+ectation does not, in the
absence of fraud, avoid a contract of marine insurance.
Sub-Title 1-E
IMPLIED WARRANTIES
Sec. 111. In ever" marine insurance uon a shi or freight, or freightage, or uon an"
thing $hich is the sub)ect of marine insurance, a $arrant" is imlied that the shi is
sea$orth".
Sec. 112. : shi is sea$orth" $hen reasonabl" !t to erform the service and to
encounter the ordinar" erils of the vo"age contemlated b" the arties to the olic".
Sec. 113. :n imlied $arrant" of sea$orthiness is comlied $ith if the shi be
sea$orth" at the time of the of commencement of the ris#, e+cet in the follo$ing
cases:
(a) <hen the insurance is made for a seci!ed length of time, the imlied $arrant" is
not comlied $ith unless the shi be sea$orth" at the commencement of ever"
vo"age it underta#es during that time'
(b) <hen the insurance is uon the cargo $hich, b" the terms of the olic", descrition
of the vo"age, or established custom of the trade, is to be transhied at an
intermediate ort, the imlied $arrant" is not comlied $ith unless each vessel uon
$hich the cargo is shied, or transhied, be sea$orth" at the commencement of
each articular vo"age.
Sec. 115. : $arrant" of sea$orthiness e+tends not onl" to the condition of the
structure of the shi itself, but re7uires that it be roerl" laden, and rovided $ith a
cometent master, a su=cient number of cometent o=cers and seamen, and the
re7uisite aurtenances and e7uiment, such as ballasts, cables and anchors, cordage
and sails, food, $ater, fuel and lights, and other necessar" or roer stores and
imlements for the vo"age.
Sec. 116. <here diferent ortions of the vo"age contemlated b" a olic" difer in
resect to the things re7uisite to ma#e the shi sea$orth" therefor, a $arrant" of
sea$orthiness is comlied $ith if, at the commencement of each ortion, the shi is
sea$orth" $ith reference to that ortion.
Sec. 119. <hen the shi becomes unsea$orth" during the vo"age to $hich an
insurance relates, an unreasonable dela" in reairing the defect e+onerates the insurer
on shi or shio$ner%s interest from liabilit" from an" loss arising therefrom.
Sec. 119. : shi $hich is sea$orth" for the urose of an insurance uon the shi ma",
nevertheless, b" reason of being un!tted to receive the cargo, be unsea$orth" for the
urose of the insurance uon the cargo.
Sec. 1,.. <here the nationalit" or neutralit" of a shi or cargo is e+ressl" $arranted, it
is imlied that the shi $ill carr" the re7uisite documents to sho$ such nationalit" or
neutralit" and that it $ill not carr" an" documents $hich cast reasonable susicion
thereon.
Sub-Title 1-F
THE O!A"E AND DEIATION
Sec. 1,1. <hen the vo"age contemlated b" a marine insurance olic" is described b"
the laces of beginning and ending, the vo"age insured in one $hich conforms to the
course of sailing !+ed b" mercantile usage bet$een those laces.
Sec. 1,,. If the course of sailing is not !+ed b" mercantile usage, the vo"age insured b"
a marine insurance olic" is that $a" bet$een the laces seci!ed, $hich to a master
of ordinar" s#ill and discretion, $ould mean the most natural, direct and advantageous.
Sec. 1,1. >eviation is a dearture from the course of the vo"age insured, mentioned in
the last t$o sections, or an unreasonable dela" in ursuing the vo"age or the
commencement of an entirel" diferent vo"age.
Sec. 1,2. : deviation is roer:
(a) <hen caused b" circumstances over $hich neither the master nor the o$ner of the
shi has an" control'
(b) <hen necessar" to coml" $ith a $arrant", or to avoid a eril, $hether or not the
eril is insured against'
(c) <hen made in good faith, and uon reasonable grounds of belief in its necessit" to
avoid a eril' or
(d) <hen made in good faith, for the urose of saving human life or relieving another
vessel in distress.
Sec. 1,3. ?ver" deviation not seci!ed in the last section is imroer.
Sec. 1,5. :n insurer is not liable for an" loss haening to the thing insured subse7uent
to an imroer deviation.
Sub-Title 1-"
LOSS
Sec. 1,6. : loss ma" be either total or artial.
Sec. 1,9. ?ver" loss $hich is not total is artial.
Sec. 1,9. : total loss ma" be either actual or constructive.
Sec. 11.. :n actual total loss is cause b":
(a) : total destruction of the thing insured'
(b) /he irretrievable loss of the thing b" sin#ing, or b" being bro#en u'
(c) :n" damage to the thing $hich renders it valueless to the o$ner for the urose
for $hich he held it' or
(d) :n" other event $hich efectivel" derives the o$ner of the ossession, at the ort
of destination, of the thing insured.
Sec. 111. : constructive total loss is one $hich gives to a erson insured a right to
abandon, under Section one hundred thirt"8nine.
Sec. 11,. :n actual loss ma" be resumed from the continued absence of a shi
$ithout being heard of. /he length of time $hich is su=cient to raise this resumtion
deends on the circumstances of the case.
Sec. 111. <hen a shi is revented, at an intermediate ort, from comleting the
vo"age, b" the erils insured against, the liabilit" of a marine insurer on the cargo
continues after the" are thus reshied.
@othing in this section shall revent an insurer from re7uiring an additional remium if
the ha;ard be increased b" this e+tension of liabilit".
Sec. 112. In addition to the liabilit" mentioned in the last section, a marine insurer is
bound for damages, e+enses of discharging, storage, reshiment, e+tra freightage,
and all other e+enses incurred in saving cargo reshied ursuant to the last section,
u to the amount insured.
@othing in this or in the receding section shall render a marine insurer liable for an"
amount in e+cess of the insured value or, if there be none, of the insurable value.
Sec. 113. Aon an actual total loss, a erson insured is entitled to a"ment $ithout
notice of abandonment.
Sec. 115. <here it has been agreed that an insurance uon a articular thing, or class
of things, shall be free from articular average, a marine insurer is not liable for an"
articular average loss not deriving the insured of the ossession, at the ort of
destination, of the $hole of such thing, or class of things, even though it becomes
entirel" $orthless' but such insurer is liable for his roortion of all general average
loss assessed uon the thing insured.
Sec. 116. :n insurance con!ned in terms to an actual loss does not cover a
constructive total loss, but covers an" loss, $hich necessaril" results in deriving the
insured of the ossession, at the ort of destination, of the entire thing insured.
Sub-Title 1-H
ABANDONMENT
Sec. 119. :bandonment, in marine insurance, is the act of the insured b" $hich, after a
constructive total loss, he declares the relin7uishment to the insurer of his interest in
the thing insured.
Sec. 119. : erson insured b" a contract of marine insurance ma" abandon the thing
insured, or an" articular ortion thereof searatel" valued b" the olic", or other$ise
searatel" insured, and recover for a total loss thereof, $hen the cause of the loss is a
eril insured against:
(a) If more than three8fourths thereof in value is actuall" lost, or $ould have to be
e+ended to recover it from the eril'
(b) If it is in)ured to such an e+tent as to reduce its value more than three8fourths'
(c) If the thing insured is a shi, and the contemlated vo"age cannot be la$full"
erformed $ithout incurring either an e+ense to the insured of more than three8
fourths the value of the thing abandoned or a ris# $hich a rudent man $ould not ta#e
under the circumstances' or
(d) If the thing insured, being cargo or freightage, and the vo"age cannot be erformed,
nor another shi rocured b" the master, $ithin a reasonable time and $ith reasonable
diligence, to for$ard the cargo, $ithout incurring the li#e e+ense or ris# mentioned in
the receding sub8aragrah. *ut freightage cannot in an" case be abandoned unless
the shi is also abandoned.
Sec. 12.. :n abandonment must be neither artial nor conditional.
Sec. 121. :n abandonment must be made $ithin a reasonable time after receit of
reliable information of the loss, but $here the information is of a doubtful character, the
insured is entitled to a reasonable time to ma#e in7uir".
Sec. 12,. <here the information uon $hich an abandonment has been made roves
incorrect, or the thing insured $as so far restored $hen the abandonment $as made
that there $as then in fact no total loss, the abandonment becomes inefectual.
Sec. 121. :bandonment is made b" giving notice thereof to the insurer, $hich ma" be
done orall", or in $riting' (rovided, /hat if the notice be done orall", a $ritten notice of
such abandonment shall be submitted $ithin seven da"s from such oral notice.
Sec. 122. : notice of abandonment must be e+licit, and must secif" the articular
cause of the abandonment, but need state onl" enough to sho$ that there is robable
cause therefor, and need not be accomanied $ith roof of interest or of loss.
Sec. 123. :n abandonment can be sustained onl" uon the cause seci!ed in the notice
thereof.
Sec. 125. :n abandonment is e7uivalent to a transfer b" the insured of his interest to
the insurer, $ith all the chances of recover" and indemnit".
Sec. 126. If a marine insurer a"s for a loss as if it $ere an actual total loss, he is
entitled to $hatever ma" remain of the thing insured, or its roceeds or salvage, as if
there had been a formal abandonment.
Sec. 129. Aon an abandonment, acts done in good faith b" those $ho $ere agents of
the insured in resect to the thing insured, subse7uent to the loss, are at the ris# of
the insurer and for his bene!t.
Sec. 129. <here notice of abandonment is roerl" given, the rights of the insured are
not re)udiced b" the fact that the insurer refuses to accet the abandonment.
Sec. 13.. /he accetance of an abandonment ma" be either e+ress or imlied from
the conduct of the insurer. /he mere silence of the insurer for an unreasonable length of
time after notice shall be construed as an accetance.
Sec. 131. /he accetance of an abandonment, $hether e+ress or imlied, is
conclusive uon the arties, and admits the loss and the su=cienc" of the
abandonment.
Sec. 13,. :n abandonment once made and acceted is irrevocable, unless the ground
uon $hich it $as made roves to be unfounded.
Sec. 131. 4n an acceted abandonment of a shi, freightage earned revious to the
loss belongs to the insurer of said freightage' but freightage subse7uentl" earned
belongs to the insurer of the shi.
Sec. 132. If an insurer refuses to accet a valid abandonment, he is liable as uon
actual total loss, deducting from the amount an" roceeds of the thing insured $hich
ma" have come to the hands of the insured.
Sec. 133. If a erson insured omits to abandon, he ma" nevertheless recover his
actual loss.
Sub-Title 1-I
MEASURE OF INDEMNIT!
Sec. 135. : valuation in a olic" of marine insurance in conclusive bet$een the arties
thereto in the ad)ustment of either a artial or total loss, if the insured has some
interest at ris#, and there is no fraud on his art' e+cet that $hen a thing has been
h"othecated b" bottomr" or resondentia, before its insurance, and $ithout the
#no$ledge of the erson actuall" rocuring the insurance, he ma" sho$ the real value.
*ut a valuation fraudulent in fact, entitles the insurer to rescind the contract.
Sec. 136. : marine insurer is liable uon a artial loss, onl" for such roortion of the
amount insured b" him as the loss bears to the value of the $hole interest of the
insured in the roert" insured.
Sec. 139. <here ro!ts are searatel" insured in a contract of marine insurance, the
insured is entitled to recover, in case of loss, a roortion of such ro!ts e7uivalent to
the roortion $hich the value of the roert" lost bears to the value of the $hole.
Sec. 139. In case of a valued olic" of marine insurance on freightage or cargo, if a
art onl" of the sub)ect is e+osed to the ris#, the evaluation alies onl" in roortion
to such art.
Sec. 15.. <hen ro!ts are valued and insured b" a contract of marine insurance, a
loss of them is conclusivel" resumed from a loss of the roert" out of $hich the" are
e+ected to arise, and the valuation !+es their amount.
Sec. 151. In estimating a loss under an oen olic" of marine insurance the follo$ing
rules are to be observed:
(a) /he value of a shi is its value at the beginning of the ris#, including all articles or
charges $hich add to its ermanent value or $hich are necessar" to reare it for the
vo"age insured'
(b) /he value of the cargo is its actual cost to the insured, $hen laden on board, or
$here the cost cannot be ascertained, its mar#et value at the time and lace of lading,
adding the charges incurred in urchasing and lacing it on board, but $ithout
reference to an" loss incurred in raising mone" for its urchase, or to an" dra$bac# on
its e+ortation, or to the &uctuation of the mar#et at the ort of destination, or to
e+enses incurred on the $a" or on arrival'
(c) /he value of freightage is the gross freightage, e+clusive of rimage, $ithout
reference to the cost of earning it' and
(d) /he cost of insurance is in each case to be added to the value thus estimated.
Sec. 15,. If cargo insured against artial loss arrives at the ort of destination in a
damaged condition, the loss of the insured is deemed to be the same roortion of the
value $hich the mar#et rice at that ort, of the thing so damaged, bears to the mar#et
rice it $ould have brought if sound.
Sec. 151. : marine insurer is liable for all the e+enses attendant uon a loss $hich
forces the shi into ort to be reaired' and $here it is stiulated in the olic" that the
insured shall labor for the recover" of the roert", the insurer is liable for the e+ense
incurred thereb", such e+ense, in either case, being in addition to a total loss, if that
after$ards occurs.
Sec. 152. : marine insurer is liable for a loss falling uon the insured, through a
contribution in resect to the thing insured, re7uired to be made b" him to$ards a
general average loss called for b" a eril insured against'rovided, that the liabilit" of
the insurer shall be limited to the roortion of contribution attaching to his olic" value
$here this is less than the contributing value of the thing insured.
Sec. 153. <hen a erson insured b" a contract of marine insurance has a demand
against others for contribution, he ma" claim the $hole loss from the insurer,
subrogating him to his o$n right to contribution. *ut no such claim can be made uon
the insurer after the searation of the interests liable to the contribution, nor $hen the
insured, having the right and oortunit" to enforce the contribution from others, has
neglected or $aived the e+ercise of that right.
Sec. 155. In the case of a artial loss of shi or its e7uiment, the old materials are to
be alied to$ards a"ment for the ne$. Anless other$ise stiulated in the olic", a
marine insurer is liable for onl" t$o8thirds of the remaining cost of reairs after such
deduction, e+cet that anchors must be aid in full.
Title #
FIRE INSURANCE
Sec. 156. :s used in this Bode, the term-!re insurance-shall include insurance against
loss b" !re, lightning, $indstorm, tornado or earth7ua#e and other allied ris#s, $hen
such ris#s are covered b" e+tension to !re insurance olicies or under searate
olicies.
Sec. 159. :n alteration in the use or condition of a thing insured from that to $hich it is
limited b" the olic" made $ithout the consent of the insurer, b" means $ithin the
control of the insured, and increasing the ris#s, entitles an insurer to rescind a contract
of !re insurance.
Sec. 159. :n alteration in the use or condition of a thing insured from that to $hich it is
limited b" the olic", $hich does not increase the ris#, does not afect a contract of !re
insurance.
Sec. 16.. : contract of !re insurance is not afected b" an" act of the insured
subse7uent to the e+ecution of the olic", $hich does not violate its rovisions, even
though it increases the ris# and is the cause of the loss.
Sec. 161. If there is no valuation in the olic", the measure of indemnit" in an
insurance against !re is the e+ense it $ould be to the insured at the time of the
commencement of the !re to relace the thing lost or in)ured in the condition in $hich
at the time of the in)ur"' but if there is a valuation in a olic" of !re insurance, the
efect shall be the same as in a olic" of marine insurance.
Sec. 16,. <henever the insured desires to have a valuation named in his olic",
insuring an" building or structure against !re, he ma" re7uire such building or
structure to be e+amined b" an indeendent araiser and the value of the insured%s
interest therein ma" then be !+ed as bet$een the insurer and the insured. /he cost of
such e+amination shall be aid for b" the insured. : clause shall be inserted in such
olic" stating substantiall" that the value of the insured%s interest in such building or
structure has been thus !+ed. In the absence of an" change increasing the ris#
$ithout the consent of the insurer or of fraud on the art of the insured, then in case
of a total loss under such olic", the $hole amount so insured uon the insured%s
interest in such building or structure, as stated in the olic" uon $hich the insurers
have received a remium, shall be aid, and in case of a artial loss the full amount of
the artial loss shall be so aid, and in case there are t$o or more olicies covering
the insured%s interest therein, each olic" shall contribute ro rata to the a"ment of
such $hole or artial loss. *ut in no case shall the insurer be re7uired to a" more
than the amount thus stated in such olic". /his section shall not revent the arties
from stiulating in such olicies concerning the reairing, rebuilding or relacing of
buildings or structures $holl" or artiall" damaged or destro"ed.
Sec. 161. @o olic" of !re insurance shall be ledged, h"othecated, or transferred to
an" erson, !rm or coman" $ho acts as agent for or other$ise reresents the issuing
coman", and an" such ledge, h"othecation, or transfer hereafter made shall be void
and of no efect insofar as it ma" afect other creditors of the insured.
Title $
CASUALT! INSURANCE
Sec. 162. Basualt" insurance is insurance covering loss or liabilit" arising from accident
or misha, e+cluding certain t"es of loss $hich b" la$ or custom are considered as
falling e+clusivel" $ithin the scoe of other t"es of insurance such as !re or marine. It
includes, but is not limited to, emlo"er%s liabilit" insurance, motor vehicle liabilit"
insurance, late glassinsurance, burglar" and theft insurance, ersonal accident and
health insurance as $ritten b" non8life insurance comanies, and other substantiall"
similar #inds of insurance.
Title %
SURET!SHIP
Sec. 163. : contract of suret"shi is an agreement $hereb" a art" called the suret"
guarantees the erformance b" another art" called the rincial or obligor of an
obligation or underta#ing in favor of a third art" called the obligee. It includes o=cial
recogni;ances, stiulations, bonds or underta#ings issued b" an" coman" b" virtue of
and under the rovisions of :ct @o. 315, as amended b" :ct @o. ,,.5.
Sec. 165. /he liabilit" of the suret" or sureties shall be )oint and several $ith the obligor
and shall be limited to the amount of the bond. It is determined strictl" b" the terms of
the contract of suret"shi in relation to the rincial contract bet$een the obligor and
the obligee.(:s amended b" (.>. @o. 1233).
Sec. 166. /he suret" is entitled to a"ment of the remium as soon as the contract of
suret"shi or bond is erfected and delivered to the obligor. @o contract of suret"shi
or bonding shall be valid and binding unless and until the remium therefor has been
aid, e+cet $here the obligee has acceted the bond, in $hich case the bond becomes
valid and enforceable irresective of $hether or not the remium has been aid b" the
obligor to the suret":(rovided, /hat if the contract of suret"shi or bond is not acceted
b", or !led $ith the obligee, the suret" shall collect onl" reasonable amount, not
e+ceeding !ft" er centum of the remium due thereon as service fee lus the cost of
stams or other ta+es imosed for the issuance of the contract or bond:(rovided,
ho$ever,/hat if the non8accetance of the bond be due to the fault or negligence of the
suret", no such service fee, stams or ta+es shall be collected.
In the case of a continuing bond, the obligor shall a" the subse7uent annual remium
as it falls due until the contract of suret"shi is cancelled b" the obligee or b" the
Bommissioner or b" a court of cometent )urisdiction, as the case ma" be.
Sec. 169. (ertinent rovisions of the Bivil Bode of the (hiliines shall be alied in a
suletor" character $henever necessar" in interreting the rovisions of a contract
of suret"shi.
Title &
LIFE INSURANCE
Sec. 169. Cife insurance is insurance on human lives and insurance aertaining
thereto or connected there$ith.
Sec. 19.. :n insurance uon life ma" be made a"able on the death of the erson, or
on his surviving a seci!ed eriod, or other$ise contingentl" on the continuance or
cessation of life.
?ver" contract or ledge for the a"ment of endo$ments or annuities shall be
considered a life insurance contract for urose of this Bode.
In the absence of a )udicial guardian, the father, or in the latter%s absence or
incaacit", the mother, or an" minor, $ho is an insured or a bene!ciar" under a
contract of life, health or accident insurance, ma" e+ercise, in behalf of said minor, an"
right under the olic", $ithout necessit" of court authorit" or the giving of a bond,
$here the interest of the minor in the articular act involved does not e+ceed t$ent"
thousand esos. Such right ma" include, but shall not be limited to, obtaining a olic"
loan, surrendering the olic", receiving the roceeds of the olic", and giving the
minor%s consent to an" transaction on the olic".
Sec. 19.8:. /he insurer in a life insurance contract shall be liable in case of suicides
onl" $hen it is committed after the olic" has been in force for a eriod of t$o "ears
from the date of its issue or of its last reinstatement, unless the olic" rovides a
shorter eriod:(rovided, ho$ever, /hat suicide committed in the state of insanit" shall
be comensable regardless of the date of commission.(:s amended b" *.(. *lg. 962).
Sec. 191. : olic" of insurance uon life or health ma" ass b" transfer, $ill or
succession to an" erson, $hether he has an insurable interest or not, and such
erson ma" recover uon it $hatever the insured might have recovered.
Sec. 19,. @otice to an insurer of a transfer or be7uest thereof is not necessar" to
reserve the validit" of a olic" of insurance uon life or health, unless thereb"
e+ressl" re7uired.
Sec. 191. Anless the interest of a erson insured is suscetible of e+act ecuniar"
measurement, the measure of indemnit" under a olic" of insurance uon life or
health is the sum !+ed in the olic".
Chapter I
COMPULSOR! MOTOR EHICLE
LIABILIT!INSURANCE
Sec. 161. 0or uroses of this chater:
(a)-Motor Vehicle-is an" vehicle as de!ned in section three, aragrah (a) of Deublic
:ct @umbered 0our /housand 4ne Eundred /hirt"8Si+, 4ther$ise #no$n as the-Cand
/ransortation and /ra=c Bode.-
(b)-(assenger-is an" fare a"ing erson being transorted and conve"ed in and b" a
motor vehicle for transortation of assengers for comensation, including ersons
e+ressl" authori;ed b" la$ or b" the vehicle%s oerator or his agents to ride $ithout
fare.
(c)-/hird8(art"-is an" erson other than a assenger as de!ned in this section and shall
also e+clude a member of the household, or a member of the famil" $ithin the second
degree of consanguinit" or a=nit", of a motor vehicle o$ner or land transortation
oerator, as li#e$ise de!ned herein, or his emlo"ee in resect of death, bodil" in)ur",
or damage to roert" arising out of and in the course of emlo"ment.(:s amended b"
(.>. @o. 1912 and 1991).
(d)-4$ner-or-motor vehicle o$ner-means the actual legal o$ner of a motor vehicle, in
$hose name such vehicle is dul" registered $ith the Cand /ransortation Bommission'
(e)-Cand transortation oerator-means the o$ner or o$ners of motor vehicles for
transortation of assengers for comensation, including school buses'
(f)-Insurance olic"-or-(olic"-refers to a contract of insurance against assenger and
thirt"8art" liabilit" for death or bodil" in)uries and damaged to roert" arising from
motor vehicle accidents.(:s amended b" (.>. @o. 1233 and 1912).
Sec. 162. It shall be unla$ful for an" land transortation oerator or o$ner of a motor
vehicle to oerate the same in the ublic high$a"s unless there is in force in relation
thereto a olic" of insurance or guarant" in cash or suret" bond issued in accordance
$ith the rovisions of this chater to indemnif" the death, bodil" in)ur", andFor damage
to roert" of a third8art" or assenger, as the case ma" be, arising from the use
thereof.(:s amended b" (.>. @o. 1233 and 1912).
Sec. 163. /he Bommissioner shall furnish the Cand /ransortation Bommissioner $ith a
list of insurance comanies authori;ed to issue the olic" of insurance or suret" bond
re7uired b" this chater.(:s amended b" (.>. @o. 1912).
Sec. 165. /he Cand /ransortation Bommission shall not allo$ the registration or
rene$al of registration of an" motor vehicle $ithout !rst re7uiring from the land
transortation oerator or motor vehicle o$ner concerned the resentation and !ling of
a substantiating documentation in a form aroved b" the Bommissioner evidencing
that the olic" of insurance or guarant" in cash or suret" bond re7uired b" this chater
is in efect.(:s amended b" (.>. @o. 1233).
Sec. 166. ?ver" land transortation oerator and ever" o$ner of a motor vehicle shall,
before al"ing for the registration or rene$al of registration of an" motor vehicle, at
his otion, either secure an insurance olic" or suret" bond issued b" an" insurance
coman" authori;ed b" the Bommissioner or ma#e a cash deosit in such amount as
herein re7uired as limit of liabilit" for uroses seci!ed in section three hundred
sevent"8four.
(1) In the case of a land transortation oerator, the insurance guarant" in cash or
suret" bond shall cover liabilit" for death or bodil" in)uries of third8arties andFor
assengers arising out of the use of such vehicle in the amount not less than t$elve
thousand esos er assenger or third art" and an amount, for each of such
categories, in an" one accident of not less than that set forth in the follo$ing scale:
(a) Motor vehicles $ith an authori;ed caacit" of t$ent"8si+ or more assengers: 0ift"
thousand esos'
(b) Motor vehicles $ith an authori;ed caacit" of from t$elve to t$ent"8!ve
assengers: 0ort" thousand esos'
(c) Motor vehicles $ith an authori;ed caacit" of from si+ to eleven assengers: /hirt"
thousand esos'
(d) Motor vehicles $ith an authori;ed caacit" of !ve or less assengers: 0ive thousand
esos multilied b" the authori;ed caacit".
(rovided, ho$ever,/hat such cash deosit made to, or suret" bond osted $ith, the
Bommissioner shall be resorted to b" him in cases of accidents the indemnities for
$hich to third8arties andFor assengers are not settled accordingl" b" the land
transortation oerator and, in that event, the said cash deosit shall be relenished
or such suret" bond shall be restored $ith si+t" da"s after imairment or e+ir", as the
case ma" be, b" such land transortation oerator, other$ise, he shall secure the
insurance olic" re7uired b" this chater. /he aforesaid cash deosit ma" be invested
b" the Bommissioner in readil" mar#etable government bonds andFor securities.
(,) In the case of an o$ner of a motor vehicle, the insurance or guarant" in cash or
suret" bond shall cover liabilit" for death or in)ur" to third arties in an amount not
less than that set forth in the follo$ing scale in an" one accident:
I. (rivate Bars
(a) *antam : /$ent" thousand esos'
(b) Cight : /$ent" thousand esos'
(c) Eeav" : /hirt" thousand esos'
II. 4ther (rivate Vehicles
(a) /ric"cles, motorc"les, and scooters : /$elve thousand esos'
(b) Vehicles $ith an unladen $eight of ,,5.. #ilos or less : /$ent" thousand esos'
(c) Vehicles $ith an unladen $eight of bet$een ,,5.1 #ilos and 1,91. #ilos : /hirt"
thousand esos'
(d) Vehicles $ith an unladen $eight over 1,91. #ilos : 0ift" thousand esos.
/he Bommissioner ma", if $arranted, set forth schedule of indemnities for the a"ment
of claims for death or bodil" in)uries $ith the coverages set forth herein.(:s amended
b" (.>. @o. 1233 and 1912).
Sec. 169. :n" claim for death or in)ur" to an" assenger or third art" ursuant to the
rovisions of this chater shall be aid $ithout the necessit" of roving fault or
negligence of an" #ind' (rovided, /hat for uroses of this section:
(i) /he total indemnit" in resect of an" erson shall not e+ceed !ve thousand esos'
(ii) /he follo$ing roofs of loss, $hen submitted under oath, shall be su=cient evidence
to substantiate the claim:
(a) (olice reort of accident' and
(b) >eath certi!cate and evidence su=cient to establish the roer a"ee' or
(c) Medical reort and evidence of medical or hosital disbursement in resect of $hich
refund is claimed'
(iii) Blaim ma" be made against one motor vehicle onl". In the case of an occuant of a
vehicle, claim shall lie against the insurer of the vehicle in $hich the occuant is riding,
mounting or dismounting from. In an" other case, claim shall lie against the insurer of
the directl" ofending vehicle. In all cases, the right of the art" a"ing the claim to
recover against the o$ner of the vehicle resonsible for the accident shall be
maintained.
Sec. 169. @o land transortation oerator or o$ner of motor vehicle shall be
unreasonabl" denied the olic" of insurance or suret" bond re7uired b" this chater b"
the insurance comanies authori;ed to issue the same, other$ise, the Cand
/ransortation Bommission shall re7uire from said land transortation oerator or
o$ner of the vehicle, in lieu of a olic" of insurance or suret" bond, a certi!cate that a
cash deosit has been made $ith the Bommissioner in such amount re7uired as limits
of indemnit" in section three hundred sevent"8seven to ans$er for the assenger
andFor third8art" liabilit" of such land transortation oerator or o$ner of the vehicle.
@o insurance coman" ma" issue the olic" of insurance or suret" bond re7uired under
this chater unless so authori;ed under e+isting la$s.
/he authorit" to engage in the casualt" andFor suret" lines of business of an insurance
coman" that refuses to issue or rene$, $ithout )ust cause, the insurance olic" or
suret" bond therein re7uired shall be $ithdra$n immediatel".(:s amended b" (.>. @o.
1233 and 1912).
Sec. 19.. @o cancellation of the olic" shall be valid unless $ritten notice thereof is
given to the land transortation oerator or o$ner of the vehicle and to the Cand
/ransortation Bommission at least !fteen da"s rior to the intended efective date
thereof.
Aon receit of such notice, the Cand /ransortation Bommission, unless it receives
evidence of a ne$ valid insurance or guarant" in cash or suret" bond as rescribed in
this chater, or an endorsement of revival of the cancelled one, shall order the
immediate con!scation of the lates of the motor vehicle covered b" such cancelled
olic". /he same ma" be re8issued onl" uon resentation of a ne$ insurance olic" or
that a guarant" in cash or suret" band has been made or osted $ith the
Bommissioner and $hich meets the re7uirements of this chater, or an endorsement
or revival of the cancelled one.(:s amended b" (.>. @o. 1233).
Sec. 191. If the cancellation of the olic" or suret" bond is contemlated b" the land
transortation oerator or o$ner of the vehicle, he shall, before the olic" or suret"
bond ceases to be efective, secure a similar olic" of insurance or suret" bond to
relace the olic" or suret" bond to be cancelled or ma#e a cash deosit in su=cient
amount $ith the Bommissioner and $ithout an" ga, !le the re7uired documentation
$ith the Cand /ransortation Bommission, and notif" the insurance coman"
concerned of the cancellation of its olic" or suret" bond.(:s amended b" (.>. @o.
1233).
Sec. 19,. In case of change of o$nershi of a motor vehicle, or change of the engine of
an insured vehicle, there shall be no need of issuing a ne$ olic" until the ne+t date of
registration or rene$al of registration of such vehicle, and rovided that the insurance
coman" shall agree to continue the olic", such change of o$nershi or such change
of the engine shall be indicated in a corresonding endorsement b" the insurance
coman" concerned, and a signed dulicate of such endorsement shall, $ithin a
reasonable time, be !led $ith the Cand /ransortation Bommission.
Sec. 191. In the settlement and a"ment of claims, the indemnit" shall not be availed
of b" an" accident victim or claimant as an instrument of enrichment b" reason of an
accident, but as an assistance or restitution insofar as can fairl" be ascertained.
Sec. 192. :n" erson having an" claim uon the olic" issued ursuant to this Bhater
shall, $ithout an" unnecessar" dela", resent to the insurance coman" concerned a
$ritten notice of claim setting forth the nature, e+tent and duration of the in)uries
sustained as certi!ed b" a dul" licensed h"sician. @otice of claim must be !led $ithin
si+ months from date of accident, other$ise, the claim shall be deemed $aived. :ction
or suit for recover" of damage due to loss or in)ur" must be brought, in roer cases,
$ith the Bommissioner or the Bourts $ithin one "ear from denial of the claim,
other$ise, the claimant%s right of action shall rescribe.(:s amended b" (.>. 1912 and
*.(. *lg. 962).
Sec. 193. /he insurance coman" concerned shall forth$ith ascertain the truth and
e+tent of the claim and ma#e a"ment $ithin !ve $or#ing da"s after reaching an
agreement. If no agreement is reached, the insurance coman" shall a" onl" the -no8
fault-indemnit" rovided in section three hundred sevent"8eight $ithout re)udice to
the claimant from ursuing his claim further, in $hich case, he shall not be re7uired or
comelled b" the insurance coman" to e+ecute an" 7uit claim or document releasing
it from liabilit" under the olic" of insurance or suret" bond issued.(:s amended b" (.>.
@o. 1233).
In case of an" disute in the enforcement of the rovisions of an" olic" issued
ursuant to this chater, the ad)udication of such disute shall be $ithin the original
and e+clusive )urisdiction of the Bommissioner, sub)ect to the limitations rovided in
section four hundred si+teen.
Sec. 195. It shall be unla$ful for a land transortation oerator or o$ner of motor
vehicle to re7uire his or its drivers or other emlo"ees to contribute in the a"ment of
remiums.
Sec. 196. @o government o=ce or agenc" having the dut" of imlementing the
rovisions of this chater nor an" o=cial or emlo"ee thereof shall act as agent in
rocuring the insurance olic" or suret" bond rovided for herein. /he commission of
an agent rocuring the said olic" or bond shall in no case e+ceed ten er centum of
the amount of the remiums therefor.
Sec. 199. :n" land transortation oerator or o$ner of motor vehicle or an" other
erson violating an" of the rovisions of the receding sections shall be unished b" a
!ne of not less than !ve hundred esos but not more than one thousand esos andFor
imrisonment for not more than si+ months. /he violation of section three hundred
sevent"8seven b" a land transortation oerator shall be a su=cient cause for the
revocation of the certi!cate of ublic convenience issued b" the *oard of /ransortation
covering the vehicle concerned.
Sec. 199. <henever an" violation of the rovisions of this chater is committed b" a
cororation or association, or b" a government o=ce or entit", the e+ecutive o=cer or
o=cers of said cororation, association or government o=ce or entit" $ho shall have
#no$ingl" ermitted, or failed to revent, said violation shall be held liable as
rincials.