- What is Differences between co-insurance from re-insurance. (1994 Bar Exams)
CO-INSURANCE is the percentage in the value of the insured property which the insured himself assumes or undertakes to act as insurer to the extent of the deficiency in the insurance of the insured property. In case of loss or damage, the insurer will be liable only for such proportion of the loss or damage as the amount of insurance bears to the designated percentage of the full value of the property insured.
REINSURANCE is where the insurer procures a third party, called the reinsurer, to insure him against liability by reason of such original insurance. Basically, a reinsurance is an insurance against liability which the original insurer may incur in favor of the original insured.
- When does double insurance exist? (2005 Bar Exams)
There is double insurance when there is over-insurance with two or more companies, covering the same property, the same insurable interest and the same risk. Double insurance exists where the same person is insured by several insurers separately in respect of the same subject matter and interests. (Section 93, Insurance Code and Geagonia v. Court of Appeals, G.R. No. 114427, February 6, 1995)
- Julie and Alma formed a business partnership. Under the business name Pino Shop, the partnership engaged in a sale of construction materials. Julie insured the stocks in trade of Pino Shop with WGC Insurance Co for P350th. Subsequently, she again got an insurance contract with RSI for P1m and then from EIC for P200th. A fire of unknown origin gutted the store of the partnership. Julie filed her claims with the three insurance companies. However, her claims were denied separately for breach of policy condition which required the insured to give notice of any insurance effected covering the stocks in trade. Julie went to court and contended that she should not be blamed for the omission, alleging that the insurance agents for WGC, RSI and EIC knew of the existence of the additional insurance coverages and that she was not informed about the requirement that such other or additional insurance should be stated in the policy. Is the contention of Julie tenable? Explain. May she recover on her fire insurance policies? Explain. (1993 Bar Exams)
1) No. An insured is required to disclose the other insurances covering the subject matter of the insurance being applied for. (New Life Ent vs CA, 207 SCRA 669)
2) No, because she is guilty of violation of a warranty/condition.
- What is the nature of the liability of the several insurers in double insurance? Explain. (2005 Bar Exams)
Each insurer is bound, as between himself and other insurers, to contribute ratably to the loss in proportion to the amount for which he is liable under his contract. (Sec. 94, Insurance Code)
- X borrowed from CCC Bank. She mortgaged her house and lot in favor of the bank. X insured her house. The bank also got the house insured. (A) Is this double insurance? Explain your answer. Is this legally valid? Explain your answer. (2012 Bar Exams)
No, there is no double insurance. Double insurance exists where the same person is insured by several insurers separately with respect to the same subject and interest. (Sec. 93, Insurance Code). X's basis of insurable interest is based on ownership of the property while CCC's Bank's insurable interest is based on the loan.
