LOSS

INSURANCE

Atty. NELITA JESUSA A. BACALING

“TITLE 9

“LOSS

Loss is that injury, damage, or liability suffered by the insured, caused by the happening of the peril undertaken by the insurer to indemnify in a contract of insurance.

Claim – a claim is the formal demand of indemnity for a loss suffered by the insured or his assigns, which the insurer undertook to satisfy under a contract of insurance.

“SEC. 85. An agreement not to transfer the claim of the insured against the insurer after the loss has happened, is void if made before the loss except as otherwise provided in the case of life insurance.

>>>> Before a loss has occurred, the parties in a non-life insurance contract, cannot stipulate on the non- transferability of the proceeds of an insurance claim due to any loss experienced by the insured. Before the loss, there can be no transfer because the character of the insurance policy is one that is personal to the insured. However, after there is loss, the contract of insurance partakes the nature of an ordinary contract, the interests over which may be assigned or transferred to a third party.

“SEC. 86. Unless otherwise provided by the policy, an insurer is liable for a loss of which a peril insured against was the proximate cause, although a peril not contemplated by the contract may have been a remote cause of the loss; but he is not liable for a loss of which the peril insured against was only a remote cause.

When the peril insured against is:

1.     Remote cause – insurer is not liable

2.     Proximate cause- insurer is liable

Examples:

1.     Fire caused a tree to fall over a house of  A who insured the house against fire, but was damaged by the fallen tree- Insurer is not liable although fire which is the peril insured against, is the remote cause.

2.     Earthquake caused electrical wires to flare-up and burned the house insured against fire – Insurer is liable, although earthquake which is not the peril insured against is the remote cause of the fire.

“SEC. 87. An insurer is liable where the thing insured is rescued from a peril insured against that would otherwise have caused a loss, if, in the course of such rescue, the thing is exposed to a peril not insured against, which permanently deprives the insured of its possession, in whole or in part; or where a loss is caused by efforts to rescue the thing insured from a peril insured against.

>>>>> Example:      If in the course of putting off the fire or in an effort to stop the spread thereof firefighters doused water on personal properties which were damaged not by fire but because of the water, the insurer is still liable for the said damage or loss of personal property.

“SEC. 88. Where a peril is especially excepted in a contract of insurance, a loss, which would not have occurred but for such peril, is thereby excepted although the immediate cause of the loss was a peril which was not excepted.

>>>> If the insurance contract specifically names an excepted peril, any loss caused by such peril does not make the insurer liable, even if that excepted peril is merely the proximate cause and the immediate cause of the loss is a different peril and not excepted in the policy.

>>>>>> Cause of loss may be due to the occurrence of not just one but different perils. If one peril caused the loss but it is specifically excepted, meaning the insurer will indemnify EXCEPT for that peril, then the insurer will not be liable even if another peril not excepted is really the immediate cause of the loss  and the excepted peril is only the proximate cause.

>>>>>>>>Proximate cause – the loss would not have occurred if not for the happening of the peril.

“SEC. 89. An insurer is not liable for a loss caused by the willful act or through the connivance of the insured; but he is not exonerated by the negligence of the insured, or of the insurance agents or others.

>>>>> Willful acts employed in order to collect a claim are fraudulent and will not make the insurer liable. However, losses experienced due to the negligence of the insured, do not automatically relieve the insurer from liability. In most cases, the very reason why people insure themselves or their properties, is because of losses that may be brought about by negligence, carelessness, or neglect by the insured or his agents.