"TITLE 11"

DOUBLE INSURANCE

"Section 95. A double insurance exists where the same person is insured by several insurers
separately in respect to the same subject and interest.

NOTES:

Double insurance defined. Section 93 defines double insurance. In insurance contracts, the terms
"additional insurance," "other insurance," an d "double insurance" are used interchangeably, although
there is a technical difference in their meanings. (29 Am. Jur. 567.) In double insurance, there is co-
insurance (see Sec. 157.) by two or more insurers; hence, it is also known as "co-insurance."

Requisites of double insurance:

(1) The person insured is the same;

(2) Two or more insurers insuring separately;

(3) The subject matter is the same;

(4) The interest insured is also the same; and

(5) The risk or peril insured against is likewise the same.

EXAMPLES: (1) X insures his house against fire with Y company and Z company. Double insurance exists in
this case because al l the requisites are present. The subject matter insured is the house. The interest
insured is X's interest in the house.

(2) X mortgages his house to B. Insurance taken by X and another taken by B on the same house is not
double insurance because it is not on the same interest, (see Sec. 8.)

(3) X insures his automobile against fire with Y company and against theft with Z company. There is no
double insurance because the automobile is not insured against the same risk or peril.

Double insurance distinguished from over-insurance.

(1) There is over-insurance when the amount of the insurance is beyond the value of the insured's
insurable interest . In double insurance, ther e ma y b e n o over-insuranc e a s whe n th e sum total o f
the amount s o f the policie s issued doe s no t exceed the insurable interest of the insured.

(2) While i n doubl e insuranc e ther e ar e alway s severa l insurers, i n over-insuranc e ther e ma y b e onl
y on e insure r involved. From th e abov e explanation , doubl e insuranc e an d over insurance may exist
at the same time or neither may exist at all. Double insuranc e i s th e term use d instea d o f "co-
insurance" when th e sum s insure d excee d th e insurabl e interest . I n such case, there is "over-
insurance" by "double insurance."

EXAMPLE: If X's insurable interes t in a hous e i s P1,000,000.0 0 and he insured it with Y company for
Pl,100,000.00, there is overinsurance but there is no double insurance.

On the other hand , i f he insure s the same house with Y company for P600,000 and Z company for
P400,000.00, there is double insurance but there is no over-insurance.

If the amount of insurance with Y company is P450,000.00, there is not only double insurance but also
over-insurance. Now i f X procure s onl y on e polic y fo r th e amoun t o f P1,000,000.00 o r a lesse r
amount , ther e i s neithe r doubl e insurance nor over-insurance.

"Section 96. Where the insured in a policy other than life is over insured by double insurance:

"(a) The insured, unless the policy otherwise provides, may claim payment from the insurers in
such order as he may select, up to the amount for which the insurers are severally liable under their
respective contracts;

"(b) Where the policy under which the insured claims is a valued policy, any sum received by him
under any other policy shall be deducted from the value of the policy without regard to the actual
value of the subject matter insured;

"(c) Where the policy under which the insured claims is an unvalued policy, any sum received by
him under any policy shall be deducted against the full insurable value, for any sum received by
him under any policy;

"(d) Where the insured receives any sum in excess of the valuation in the case of valued policies, or
of the insurable value in the case of unvalued policies, he must hold such sum in trust for the
insurers, according to their right of contribution among themselves;

"(e) Each insurer is bound, as between himself and the other insurers, to contribute ratably to the
loss in proportion to the amount for which he is liable under his contract.

"TITLE 12"

REINSURANCE

"Section 97. A contract of reinsurance is one by which an insurer procures a third person to insure
him against loss or liability by reason of such original insurance.

"Section 98. Where an insurer obtains reinsurance, except under automatic reinsurance treaties, he
must communicate all the representations of the original insured, and also all the knowledge and
information he possesses, whether previously or subsequently acquired, which are material to the
risk.

"Section 99. A reinsurance is presumed to be a contract of indemnity against liability, and not
merely against damage.

"Section 100. The original insured has no interest in a contract of reinsurance.