Insurable interest in property is limited only to the value of the property and requires that interest

therein must exist not only when the policy was taken but also during the time of loss in contrast with
insurable interest in life which is has no limit because cannot be valued in terms of money and only
require existence of interest at the time the policy is taken.z

Insurable interest
Life: no limit: must exist at the time the policy was taken
Property: limited only to the value of the property: exists at the time the policy is taken and at the time
of loss. It is sufficient that the person shall be liable to loss should the thing insured is injured or
destroyed by the peril it is insured against. partial loss: recover only in proportion.

Mortgagor has insurable interest on his property as owner up to the full value of his property,
irrespective of said property in general. Except marine insurance.
Morgagee: only to the extent of his credit

Double Insurance: Same is insured for the same subject and interest
Elements: the person insured the same, insured to two or more insurers insuring separately, identity of
the subject, identity of interest insured, identity of risk or peril insured against

Reinsurance: The insurer procures a third person to secure him against loss or liability by reason of such
original insurance. Details: different interest, the insurer becomes the insured in relation to the
reinsurer, the original insured has no interest in the reinsurance contract.
Reinsurer may avail of all the defense which the reinsured may avail of against the original
insured.
Facultative insurance: the reinsurance may or may not accept participation in the risk insured.
Treaty: one agrees to cede and the other to accept reinsurance business pursuant to the
provisions of the treaty.

Multiple or several interest on the same property

Mortgage: the first mortgagee:

G. Perfection:

I. Offer and acceptance/consensuality

Cognition theory: Contract is perfected from the time the applicant came to know the
acceptance of the offer by the insurer. However, without payment of the premium, there is
not perfected contract of insurance following the cash and carry rule where the insurer is
entitled to the payment of premium as soon as the insured is exposed to the peril insured
against. Notwithstanding any agreement to the contrary, no insurance contract is valid and
binding unless and until the premium is paid.

a. Delay in acceptance: Delay in acceptance: not acceptance even though the premium has
been received. Failure to inform disapproval is not approval.
 b. Delivery of police – insurer deemed to authorized an agent to receive premiums upon
delivery of the policy to the latter.
Non-default options in life insurance:
Extended term reduced paid up cash value cash surrender value