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Notes in Insurance - BemJamison Endterm PDF
Notes in Insurance - BemJamison Endterm PDF
REPRESENTATION Note:
- Representations need not be literally true; it is
Section 36 – A representation may be oral or written. enough that it is only substantially true.
- Examples:
o If one is asked if he drinks, the question will be
REPRESENTATION construed as referring to habitual use. So if you
- Is a factual statement made by the insured at the drink only when there is an occasion, they you
time of, or prior to, the issuance of the policy to give, can say NO.
information to the insurer and otherwise induce him o If you are asked if you had any illnesses, local
to enter into the insurance contract. disease or injury in any organ, you can still say
NO even if three weeks before you were suffering
REPRESENTATION VS. CONCEALMENT from LBM.
Representation Concealment
A positive act as the A negative act, meaning it is
Section 39 – A representation as to the future is to be
insured volunteers such the failure to do something
deemed a promise, unless it appears that it was
facts which is required
merely a statement of belief or expectation.
May be made at the time of Usually occurs prior to
the issuance of the contract making of the insurance
contract
MISREPRESENTATION
Reference: Ateneo Notes
5|P age NOTES IN INSURANCE Bem Jamison
DIFFERENT KINDS OF REPRESENTATIONS mere expression of opinion, which will avoid a
1. Oral or written; contract ONLY when made in bad faith.
2. Made at the time of the issuance of the policy or
before; Section 40 – A representation cannot qualify an
3. Affirmative or promissory express provision in a contract of insurance, but it may
qualify an implied warranty.
AFFIRMATIVE REPRESENTATION
- It is any allegation as to the existence or non-
existence of a fact when the contract begins. Ratio: A representation cannot qualify an express provision
- Example: When the insured states that the house or an express warranty in a contract of insurance because
subject of the insurance is used only for residential a representation is not a part of the contract but only a
purposes. collateral inducement to it.
PROMISSORY REPRESENTATION
Section 41 – A representation may be altered or
- It is any promise to be fulfilled after the contract has
withdrawn before the insurance is effected, but not
come into existence or any statement concerning
afterwards.
what is to happen during the existence of the
insurance.
- Example: Section 42 – A representation must be presumed to
o An applicant for fire insurance on a building refer to the date on which the contract goes into
orally promised that the building will be effect.
occupied.
o An applicant for fire insurance on a building
WHEN THERE IS FALSE REPRESENTATION
orally promised to install two fire extinguishers
- No false representation: If the representation was
within the bldg.
true at the time the contract takes effect, although it
became false at the time it was made.
NATURE OF A PROMISSORY REPRESENTATION - With false representation: If although the
1. It is used to indicate a parol or oral promise made in representation was true at the time it was made, it
connection with the insurance, but not incorporated subsequently became false at the time the contract
in the policy. took effect.
- Non-performance of such a promise CANNOT be
shown by the insurer in defense to an action on the
policy, but proof that the promise was made with Section 43 – When a person insured has no personal
fraudulent intent and will serve to defeat the knowledge of a fact, he may nevertheless repeat
insurance. information which he has upon the subject, and which
2. It is an undertaking by the insured, inserted in the he believes to be true, with the explanation that he
policy, but not specifically made a warranty. does so on the information of others; or he may
- Merely an executory term of the contract, and not submit the information, in its whole extent, to the
property a representation; it is deemed substantially a insurer; and in neither case is he responsible for its
condition or warranty. truth, unless it proceeds from an agent of the insured,
whose duty it is to give the information.
EFFECT OF FALSE REPRESENTATION BASED ON OPINION
OR EXPECTATION Example:
- A representation of an expectation, intention, belief - If the insured has no personal knowledge of the
opinion or judgment of the insured, although false, causes of the death of his parents because they died
will NOT avoid the policy of insurance if there is NO when the injured was still an infant, he may report
actual fraud in inducing the acceptance of the risk or information obtained from friends and relatives if he
its acceptance at a lower rate of premium. likes. In which case, he is not responsible for the
truth of the information.
DEFENSE OF THE INSURER - If the information proceeds from an agent of the
- The insurer must prove both the materiality of the insured, whose duty it is in the ordinary course of
insured’s opinion and the latter’s intent to deceive. business to communicate such information to his
- If the representation is one of fact, all the insurer principal, and it is possible for the agent under such
needs to prove is its falsity and materiality. The circumstances in the exercise of due diligence to have
intent to deceive is already presumed. made such communication before the making of the
contract, the insured will be liable for the truth.
WHEN IS REPRESENTATION DEEMED A MERE
EXPRESSION OF OPINION
- An oral representation as to a future event, or Section 44 – A representation is to be deemed false
condition over which the insured has no control, with when the facts fail to correspond with its assertions or
reference to property or life insured will be deemed a stipulations.