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Week 1,2 - Cardinal Principles in Insurance - Pan Malayan Insurance Co, Vs. CA Digest - Digest

Week 1,2 - Cardinal Principles in Insurance - Pan Malayan Insurance Co, Vs. CA Digest - Digest

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Published by Emrys Pendragon
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Published by: Emrys Pendragon on Jan 27, 2014
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01/27/2014

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PAN-MALAYAN INSURANCE vs CA FACTS   Canlubang Corp owned the vehicle that was sideswiped by Erlinda Fabie, due

to the recklessness of the latter. Such vehicle was insured by Pan-Malayan Insurance. Canlubang corp claimed the policy to repair the vehicle, costing around 45k. In turn, The insurance company served demand letters to Erlinda Fabie to reimburse them for the amount it paid to repair the vehicle. The demand letters were unheeded.

ISSUE  HELD  Since the insurance company indemnified Canlubang corp for the damage its vehicle sustained, the insurance company has been subrogated the rights of the insured to recover the amount of damage against Erlinda Fabie. It gave the insurance company a cause of action against Erlinda Fabie. The right of subrogation simply accrues upon payment of the insurance claim by the insurer. General Rule: The insurer is subrogated the rights of the insured to go after the person who caused damage to the insured. The insurer simply steps into the shoes of the insured. Exception 1: If the insured by his own act, releases the wrong doer for the loss or damage, then the insurer's right of subrogation is defeated. If the insured releases or absolves the wrong doer, then the insurer cannot go after the wrong doer and cannot recover the amount it had paid to the insured. Exception 2: Where the insurer pays the assured for a loss which is not a risk covered by the policy, thereby affeecting voluntary payment, the former has no right of subrogation against the 3rd party liable for the loss. *Note on Exception 1: If the wrong doer pays the insured any amount to settle the matter and the insured still claims the policy, the insurer can go after the insured for the amount paid to it by the wrongdoer. W/N The insurance company has a cause of action against Erlinda Fabie? - YES

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