OVERVIEW OF MOTOR CAR INSURANCE
Define Motor Car Insurance.
It is a contract whereby one (1) party promises for a consideration to indemnify the other for direct loss or damage of the insured vehicle and to pay any claim for death of or bodily injury to and property damage of any Third Party caused by or arising from the ownership or operation of the vehicle.
In summary, the motor car insurance shall cover the following:
What are the kinds of motor car insurance policies?
There are five (5) kinds of motor car insurance policies?
What is a comprehensive motor car insurance policy?
A comprehensive motor car insurance policy is one in which all four (4) sections are availed of by the insured. It shall cover death or bodily injury or death of a third party, property damage to third parties, and damage to or theft of the insured vehicle.
What are the four (4) main sections of Standard Motor Car Insurance policy?
They are as follows:
Other than the CTPL, the rest are optional covers. Availment of the rest of the sections is subject to the payment of additional premium.
It is a contract whereby one (1) party promises for a consideration to indemnify the other for direct loss or damage of the insured vehicle and to pay any claim for death of or bodily injury to and property damage of any Third Party caused by or arising from the ownership or operation of the vehicle.
In summary, the motor car insurance shall cover the following:
- Death or bodily injury or death of a third party.
- Property damage to third parties and
- Loss of or Damage to the insured vehicle.
What are the kinds of motor car insurance policies?
There are five (5) kinds of motor car insurance policies?
- Private Car
- Commercial Vehicle
- Motor Trade
- Motor Cycle
- Land Transportation Operators Policy
What is a comprehensive motor car insurance policy?
A comprehensive motor car insurance policy is one in which all four (4) sections are availed of by the insured. It shall cover death or bodily injury or death of a third party, property damage to third parties, and damage to or theft of the insured vehicle.
What are the four (4) main sections of Standard Motor Car Insurance policy?
They are as follows:
- Section 1 - Compulsory Third Liability Insurance
- Section 2 - No Fault Indemnity Clause
- Section 3 - Own Damage Cover
- Section 4 - Excess Third Party Bodily Injury Cover
Other than the CTPL, the rest are optional covers. Availment of the rest of the sections is subject to the payment of additional premium.
COMPULSORY THIRD PARTY LIABILITY INSURANCE
What are the brief features of CTPL?
It is a compulsory insurance that seeks provide cover for death and/or bodily injury to a third party. It is a pre-requisite for the registration of one’s motor vehicle with the Land Transportation Office.
CTPL is "primarily intended to provide compensation for the death or bodily injuries suffered by innocent third parties or passengers as a result of a negligent operation and use of motor vehicles. The victims and/or their dependents are assured of immediate financial assistance, regardless of the financial capacity of motor vehicle owners." (Shafer vs RTC, 167 SCRA 386).
Will the CTPL respond if the vehicle involved is the accident is not owned by the insured?
It depends. If is it is a private car, the claim will be paid. Under the Private Car Motor Insurance Policy, the policy shall indemnify the insured while "personally driving a private car not belonging to him and not hired to him under a hire purchase agreement."
What is the nature of the insured’s liability under the CTPL?
The insurer’s liability is primary and accrues immediately upon the occurrence of the injury or event upon which liability depends, and does not depend on the recovery of judgment by the injured party against the insured. (Shafer vs RTC, 167 SCRA 386)
While driving his car along EDSA, Cesar sideswiped Roberto, causing injuries to the latter, Roberto sued Cesar and the third party liability insurer for damages and/or insurance proceeds. The insurance company moved to dismiss the complaint, contending that the liability of Cesar has not yet been determined with finality.
a) Is the contention of the insurer correct? Explain. b) May the insurer be held liable with Cesar?
No, the contention of the insurer is not correct. There is no need to wait for the decision of the court determining Cesar’s liability with finality before the third party liability insurer could be sued. The occurrence of the injury to Roberto immediately gave rise to the liability of the insurer under its policy. In other words, where an insurance policy insures directly against liability, the insurer’s liability accrues immediately upon the occurrence of the injury or event upon which the liability depends (Sherman Shafer v Judge RTC Olongapo City Branch 75 GR l-78848, Nov 14 88 167 SCRA 386)
The insurer cannot be held solidarily liable with Cesar. The liability of the insurer is based on contract while that of Cesar is based on tort. If the insurer were solidarily liable with Cesar, it could be made to pay more than the amount stated in the policy. This would, however, be contrary to the principles underlying insurance contracts. On the other hand, if the insurer were solidarily liable with Cesar and it is made to pay only up to the amount Dondee stated in the insurance policy, the principles underlying solidary obligations would be violated. (Malayan Ins Co v CA GR L-36413 Sep 26, 88 165s536; Figuracion vda de Maglana v Consolacion GR No. 60506 Aug 6, 92 212 SCRA 268)
What is extent of liability of an insurer in any given accident?
The limit of liability of an insurer shall be Php 100,000.00 per accident regardless of the number of passengers injured.
What is the deadline to file a claim against CTPL?
The claimant must file the claim within 6 months from the date of accident. Otherwise, the claim is deemed waived or abandoned.
Can a third party file a suit directly against the motor car insurer?
It is settled that where the insurance contract provides for indemnity against liability to a third party, such third party can directly sue the insurer (Caguia v. Fieldman's Insurance Co., Inc., G. R. No. 23276, November 29, 1968, 26 SCRA 178). The liability of the insurer to such third person is based on contract while the liability of the insured to the third party is based on tort (Malayan Insurance Co., Inc. v. CA, L-36413, September 26, 1988, 165 SCRA 536).
Is the insurer automatically liable to pay the third party in case the insured driver injures a pedestrian?
No. It must be proven that the insured is indeed at fault.
There are however two instances wherein the insured driver is presumed at fault:
It is a compulsory insurance that seeks provide cover for death and/or bodily injury to a third party. It is a pre-requisite for the registration of one’s motor vehicle with the Land Transportation Office.
CTPL is "primarily intended to provide compensation for the death or bodily injuries suffered by innocent third parties or passengers as a result of a negligent operation and use of motor vehicles. The victims and/or their dependents are assured of immediate financial assistance, regardless of the financial capacity of motor vehicle owners." (Shafer vs RTC, 167 SCRA 386).
Will the CTPL respond if the vehicle involved is the accident is not owned by the insured?
It depends. If is it is a private car, the claim will be paid. Under the Private Car Motor Insurance Policy, the policy shall indemnify the insured while "personally driving a private car not belonging to him and not hired to him under a hire purchase agreement."
What is the nature of the insured’s liability under the CTPL?
The insurer’s liability is primary and accrues immediately upon the occurrence of the injury or event upon which liability depends, and does not depend on the recovery of judgment by the injured party against the insured. (Shafer vs RTC, 167 SCRA 386)
While driving his car along EDSA, Cesar sideswiped Roberto, causing injuries to the latter, Roberto sued Cesar and the third party liability insurer for damages and/or insurance proceeds. The insurance company moved to dismiss the complaint, contending that the liability of Cesar has not yet been determined with finality.
a) Is the contention of the insurer correct? Explain. b) May the insurer be held liable with Cesar?
No, the contention of the insurer is not correct. There is no need to wait for the decision of the court determining Cesar’s liability with finality before the third party liability insurer could be sued. The occurrence of the injury to Roberto immediately gave rise to the liability of the insurer under its policy. In other words, where an insurance policy insures directly against liability, the insurer’s liability accrues immediately upon the occurrence of the injury or event upon which the liability depends (Sherman Shafer v Judge RTC Olongapo City Branch 75 GR l-78848, Nov 14 88 167 SCRA 386)
The insurer cannot be held solidarily liable with Cesar. The liability of the insurer is based on contract while that of Cesar is based on tort. If the insurer were solidarily liable with Cesar, it could be made to pay more than the amount stated in the policy. This would, however, be contrary to the principles underlying insurance contracts. On the other hand, if the insurer were solidarily liable with Cesar and it is made to pay only up to the amount Dondee stated in the insurance policy, the principles underlying solidary obligations would be violated. (Malayan Ins Co v CA GR L-36413 Sep 26, 88 165s536; Figuracion vda de Maglana v Consolacion GR No. 60506 Aug 6, 92 212 SCRA 268)
What is extent of liability of an insurer in any given accident?
The limit of liability of an insurer shall be Php 100,000.00 per accident regardless of the number of passengers injured.
What is the deadline to file a claim against CTPL?
The claimant must file the claim within 6 months from the date of accident. Otherwise, the claim is deemed waived or abandoned.
Can a third party file a suit directly against the motor car insurer?
It is settled that where the insurance contract provides for indemnity against liability to a third party, such third party can directly sue the insurer (Caguia v. Fieldman's Insurance Co., Inc., G. R. No. 23276, November 29, 1968, 26 SCRA 178). The liability of the insurer to such third person is based on contract while the liability of the insured to the third party is based on tort (Malayan Insurance Co., Inc. v. CA, L-36413, September 26, 1988, 165 SCRA 536).
Is the insurer automatically liable to pay the third party in case the insured driver injures a pedestrian?
No. It must be proven that the insured is indeed at fault.
There are however two instances wherein the insured driver is presumed at fault:
- Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if, at the time of the mishap, he was violating any traffic regulation (Article 2185); and
- It is disputably presumed that a driver was negligent, if he had been found guilty of reckless driving or of violating traffic regulations at least twice within the next preceding two months (Article 2184).
THIRD PARTY
Who is a third party?
The following are considered a third party:
Please refer to the table below for the degree of consanguinity or affinity.
The following are considered a third party:
- Persons inside the vehicle who are not passengers. Passenger is defined as "any fare paying person being transported and conveyed in and by a motor vehicle for transportation of passengers for compensation, including persons expressly authorized by law or by the vehicle's operator or his agents to ride without tare."
- Those who are not members of the household or who are not members of the family within the second degree of consanguinity or affinity, or who are not the employee in respect of death, bodily injury, or damage to property arising out of and in the course of employment, of the motor vehicle owner. (Insurance Commission Circular Letter 2018-70, December 28, 2018)
Please refer to the table below for the degree of consanguinity or affinity.
AUTHORIZED DRIVER'S CLAUSE
Define Authorized Driver’s Clause.
An authorized driver is defined as:
Provided that the person driving is permitted, in accordance with the licensing law or other regulations, to drive the Scheduled Vehicle, or has been permitted and is not disqualified by order of a Court of Law or by reason of any enactment or regulation in that behalf, provided that for Section I and II only of this Policy an authorized driver shall include a duly licensed driver but whose license at the time of the accident had expired.
In the past, the last paragraph was part of item b.
Now, it appears even if the driver at the time of the accident is the insured himself, he must be in possession of a valid driver's license, otherwise, the claim will be denied.
How does the authorized driver's clause apply to Theft claims?
In Villacorta vs. Insurance Commission and Empire Insurance Company, 100 SCRA 467, the insured was the owner of a Colt Lancer, Model 1976. On May 9, 1978, the vehicle was brought to the Sunday Machine Works, Inc., for general check-up and repairs. On May 11, 1978, while it was in the custody of the Sunday Machine Works, the car was allegedly taken by six (6) persons and driven out to Montalban, Rizal for a "joy ride".
Eventually, the car figured in an accident resulting to extensive damage thereto. The insured filed a claim for total loss with the insurer but claim it was denied invoking violation of the Authorized Driver's Clause.
A car owner who entrusts his car to an established car service and repair shop necessarily entrusts his car key to the shop owner and employees who are presumed to have the insured's permission to drive the car for legitimate purposes of checking or road-testing the car. The mere happenstance that the employee(s) of the shop owner diverts the use of the car to his own illicit or unauthorized purpose in violation of the trust reposed in the shop by the insured car owner does not mean that the "authorized driver" clause has been violated such as to bar recovery, provided that such employee is duly qualified to drive under a valid driver's license.
When a car is unlawfully taken, even if temporary in nature, it is the theft clause, not the "authorized driver" clause, that applies, where a car is admittedly as in this case unlawfully and wrongfully taken by some people, be they employees of the car shop or not to whom it had been entrusted, and taken for a joy ride without the owner's consent or knowledge, such taking constitutes or partakes of the nature of theft.
In Perla Compania De Seguros, Inc. vs. The Court of Appeal, Herminio Lim and Evelyn Lim (G.R. No. 96452 May 7, 1992). the insurer denied the claim of the insured on the ground that insured, who was using the vehicle before it was carnapped, was in possession of an expired driver's license at the time of the loss of said vehicle.
The risk against accident is distinct from the risk against theft. The "authorized driver clause" in a typical insurance policy is in contemplation or anticipation of accident in the legal sense in which it should be understood, and not in contemplation or anticipation of an event such as theft.
The distinction — often seized upon by insurance companies in resisting claims from their assureds — between death occurring as a result of accident and death occurring as a result of intent may, by analogy, apply to the case at bar. Thus, if the insured vehicle had figured in an accident at the time she drove it with an expired license, then, insurer could properly resist appellants' claim for indemnification for the loss or destruction of the vehicle resulting from the accident. But in the present case, the loss of the insured vehicle did not result from an accident where intent was involved; the loss in the present case was caused by theft, the commission of which was attended by intent.
In (Malayan Insurance Co., Inc., Petitioner-Appellant, vs. The Honorable Court of Appeals and Aurelio Lacson, Respondents-Appellees, G.R. No. L-59919 November 26, 1986), the Supreme Court ruled in favor of settlement as well. In this particular case, Aurelio Lacson, insured, is the owner of a Toyota NP Land Cruise which was insured with Malayan Insurance Co., Inc. On Dec. 2, 1975 while the insured vehicle was in Carlos Jamelo's shop, Rogelio Mahinay, together with his other co-employees in the shop, took and drove the Toyota Land Cruiser, who was not a duly-licensed driver at the time of the accident.
How does the authorized driver's clause apply to Own Damage claims?
In Tanco, Jr. vs. Phil. Guaranty Co. (G.R. No. L-17312 November 29, 1965), the plaintiff's brother, who was at the wheel at the time of the collision, did not have a valid license. Consequently, the denial of the claim for repairs amounting to P2,536.99 was upheld by the Supreme Court.
The fact that he eventually renewed his license one week after the accident did not cure the delinquency.
In Andrew Palermo vs. Pyramid Insurance Co., Inc. (G.R. No. L-36480 May 31, 1988), the owner/insured himself was driving the insured automobile when he met a violent accident. As a consequence, the insured car was totally wrecked.
It was held that the requirement that the driver be "permitted in accordance with the licensing or other laws or regulations to drive the Motor Vehicle and is not disqualified from driving such motor vehicle by order of a Court of Law or by reason of any enactment or regulation in that behalf," applies only when the driver" is driving on the insured's order or with his permission." It does not apply when the person driving is the insured himself.
How does the authorized driver's clause apply to death claims?
In Agapito Gutierrez vs. Capital Insurance & Surety Co., Inc. (G.R. No. L-26827 June 29, 1984), the insured jeepney figured in an accident at Buendia Avenue, Makati, Rizal. As a result, a passenger named Agatonico Ballega fell off the vehicle and died. The authorized driver of the insured, Teofilo Ventura, the jeepney driver, was duly licensed for the years 1962 and 1963. However, at the time of the accident he did not have the license.
Gutierrez paid P4,000 to the passenger's widow, Rosalina Abanes Vda. de Ballega, by reason of her husband's death.
The Supreme Court ruled that the expiration bars recovery under the policy.
In liability insurance, "the parties are bound by the terms of the policy and the right of insured to recover is governed thereby" (44 C.J.S. 934).
But the instant case deals with an insurance policy which definitively fixed the meaning of "authorized driver". That stipulation cannot be disregarded or rendered meaningless. It is binding on the insured.
HL insured his brand new car with P Ins Co for comprehensive coverage wherein the insurance company undertook to indemnify him against loss or damage to the car a) by accidental collision ... b) by fire, external explosion, burglary, or theft, and c) malicious act. After a month, the car was carnapped while parked in the parking space in front of the Intercontinental Hotel in Makati. HL’s wife who was driving said car before it was carnapped reported immediately the incident to various government agencies in compliance with the insurance requirements. Because the car could not be recovered, HL filed a claim for the loss of the car with the insurance company but it was denied on the ground that his wife who was driving the car when it was carnapped was in the possession of an expired driver’s license, a violation of the “authorized driver” clause of the insurance company.
1) May the insurance company be held liable to indemnify HL for the loss of the insured vehicle? Explain.
2) Supposing that the car was brought by HL on installment basis and there were installments due and payable before the loss of the car as well as installments not yet payable. Because of the loss of the car, the vendor demanded from HL the unpaid balance of the promissory note. HL resisted the demand and claimed that he was only liable for the installments due and payable before the loss of the car but no longer liable for other installments not yet due at the time of the loss of the car. Decide. (1993 Bar Exams)
Sheryl insured her newly-acquired car, a Nissan Maxima against loss or damage from Php 50,000.00 with the XYZ Insurance Corp. (XYZ). Under the policy, the car must be driven only by an authorized driver who is either: (1) the insured, or (2) any person driving on the insured’s order or with his permission: provided that the person driving is permitted in accordance with the licensing or other laws or regulations to drive the motor vehicle and is not disqualified from driving such motor vehicle by order of a court.
During the effectivity of the policy, the car, then driven by Sheryl herself, who had no driver’s license, met an accident and was extensively damaged. The estimated cost of repair was Php 40,000.00. Sheryl immediately notified XYZ but the latter refused to pay on the policy alleging the she violated the terms thereof when she drove it without a driver’s license.
Is the insurer correct? (1991 Bar Examination)
No. The provision requiring the driver to be not in violation of any motor vehicle law applies only if the one driving the insured vehicle is other than the insured. Since Sheryl is the insured herself. The insurer is liable to pay her for the loss she suffered.
Mayari obtained a comprehensive insurance policy on his car. The policy carried the stand “authorized driver” clause which states that the insurance company is not liable for any loss, accident or damage sustained while the car is being driven by someone other than a duly authorize driver. Kaibigan had been driving for the past fives years but it appears that his driver’s license was irregularly because he cannot read or write; neither did he take any of the prescribed driver’s test. After the initial license was issued, merely asked his wife to go to the LTO to get the renewal of his license. Mayari did not know about the irregularity in the driver’s license of Kaibigan.
Can Mayari recover on the insurance policy? Explain. (1986 Bar Examination)
Mayari cannot recover under the policy since Kaibigan, at the time of the accident, did not qualify as an authorized driver. An irregular license is not a license at all.
Will the policy respond if the driver of the insured vehicle gets involved in an accident with an expired license?
It depends.
Yes. If the driver is the insured himself. While the motor vehicle law prohibits a person from operating a motor vehicle on the highway without a license or with an expired license, an infraction of the law on the part of the insured is not a bar to recovery under the insurance contract. It, however, renders him liable to the penal provisions of the motor vehicle law. (Palermo vs. Pyramid Insurance Co., Inc., 161 SCRA 677 [1988])
No. If the driver is other than the insured himself, the requirement that the driver must not be in violation of motor vehicle law applies. (Villacorta vs. Insurance Commission, 100 SCRA 467 [1980])
What the documents that could provide that the Authorized Drivers Clause was breached?
The following documents can help establish that the driver is under the influence of alcohol:
Entries in police records made by a police officer in the performance of the duty especially enjoined by law are prima facie evidence of the fact therein stated, and their probative value may be substantiated or nullified by other competent evidence. (Stronghold Insurance Company, Inc vs. Interpacific Container Services, GR No. 194328, July 1, 2015(
An authorized driver is defined as:
- The insured; or
- Any person driving on the insured’s order or with his permission.
Provided that the person driving is permitted, in accordance with the licensing law or other regulations, to drive the Scheduled Vehicle, or has been permitted and is not disqualified by order of a Court of Law or by reason of any enactment or regulation in that behalf, provided that for Section I and II only of this Policy an authorized driver shall include a duly licensed driver but whose license at the time of the accident had expired.
In the past, the last paragraph was part of item b.
Now, it appears even if the driver at the time of the accident is the insured himself, he must be in possession of a valid driver's license, otherwise, the claim will be denied.
How does the authorized driver's clause apply to Theft claims?
In Villacorta vs. Insurance Commission and Empire Insurance Company, 100 SCRA 467, the insured was the owner of a Colt Lancer, Model 1976. On May 9, 1978, the vehicle was brought to the Sunday Machine Works, Inc., for general check-up and repairs. On May 11, 1978, while it was in the custody of the Sunday Machine Works, the car was allegedly taken by six (6) persons and driven out to Montalban, Rizal for a "joy ride".
Eventually, the car figured in an accident resulting to extensive damage thereto. The insured filed a claim for total loss with the insurer but claim it was denied invoking violation of the Authorized Driver's Clause.
A car owner who entrusts his car to an established car service and repair shop necessarily entrusts his car key to the shop owner and employees who are presumed to have the insured's permission to drive the car for legitimate purposes of checking or road-testing the car. The mere happenstance that the employee(s) of the shop owner diverts the use of the car to his own illicit or unauthorized purpose in violation of the trust reposed in the shop by the insured car owner does not mean that the "authorized driver" clause has been violated such as to bar recovery, provided that such employee is duly qualified to drive under a valid driver's license.
When a car is unlawfully taken, even if temporary in nature, it is the theft clause, not the "authorized driver" clause, that applies, where a car is admittedly as in this case unlawfully and wrongfully taken by some people, be they employees of the car shop or not to whom it had been entrusted, and taken for a joy ride without the owner's consent or knowledge, such taking constitutes or partakes of the nature of theft.
In Perla Compania De Seguros, Inc. vs. The Court of Appeal, Herminio Lim and Evelyn Lim (G.R. No. 96452 May 7, 1992). the insurer denied the claim of the insured on the ground that insured, who was using the vehicle before it was carnapped, was in possession of an expired driver's license at the time of the loss of said vehicle.
The risk against accident is distinct from the risk against theft. The "authorized driver clause" in a typical insurance policy is in contemplation or anticipation of accident in the legal sense in which it should be understood, and not in contemplation or anticipation of an event such as theft.
The distinction — often seized upon by insurance companies in resisting claims from their assureds — between death occurring as a result of accident and death occurring as a result of intent may, by analogy, apply to the case at bar. Thus, if the insured vehicle had figured in an accident at the time she drove it with an expired license, then, insurer could properly resist appellants' claim for indemnification for the loss or destruction of the vehicle resulting from the accident. But in the present case, the loss of the insured vehicle did not result from an accident where intent was involved; the loss in the present case was caused by theft, the commission of which was attended by intent.
In (Malayan Insurance Co., Inc., Petitioner-Appellant, vs. The Honorable Court of Appeals and Aurelio Lacson, Respondents-Appellees, G.R. No. L-59919 November 26, 1986), the Supreme Court ruled in favor of settlement as well. In this particular case, Aurelio Lacson, insured, is the owner of a Toyota NP Land Cruise which was insured with Malayan Insurance Co., Inc. On Dec. 2, 1975 while the insured vehicle was in Carlos Jamelo's shop, Rogelio Mahinay, together with his other co-employees in the shop, took and drove the Toyota Land Cruiser, who was not a duly-licensed driver at the time of the accident.
How does the authorized driver's clause apply to Own Damage claims?
In Tanco, Jr. vs. Phil. Guaranty Co. (G.R. No. L-17312 November 29, 1965), the plaintiff's brother, who was at the wheel at the time of the collision, did not have a valid license. Consequently, the denial of the claim for repairs amounting to P2,536.99 was upheld by the Supreme Court.
The fact that he eventually renewed his license one week after the accident did not cure the delinquency.
In Andrew Palermo vs. Pyramid Insurance Co., Inc. (G.R. No. L-36480 May 31, 1988), the owner/insured himself was driving the insured automobile when he met a violent accident. As a consequence, the insured car was totally wrecked.
It was held that the requirement that the driver be "permitted in accordance with the licensing or other laws or regulations to drive the Motor Vehicle and is not disqualified from driving such motor vehicle by order of a Court of Law or by reason of any enactment or regulation in that behalf," applies only when the driver" is driving on the insured's order or with his permission." It does not apply when the person driving is the insured himself.
How does the authorized driver's clause apply to death claims?
In Agapito Gutierrez vs. Capital Insurance & Surety Co., Inc. (G.R. No. L-26827 June 29, 1984), the insured jeepney figured in an accident at Buendia Avenue, Makati, Rizal. As a result, a passenger named Agatonico Ballega fell off the vehicle and died. The authorized driver of the insured, Teofilo Ventura, the jeepney driver, was duly licensed for the years 1962 and 1963. However, at the time of the accident he did not have the license.
Gutierrez paid P4,000 to the passenger's widow, Rosalina Abanes Vda. de Ballega, by reason of her husband's death.
The Supreme Court ruled that the expiration bars recovery under the policy.
In liability insurance, "the parties are bound by the terms of the policy and the right of insured to recover is governed thereby" (44 C.J.S. 934).
But the instant case deals with an insurance policy which definitively fixed the meaning of "authorized driver". That stipulation cannot be disregarded or rendered meaningless. It is binding on the insured.
HL insured his brand new car with P Ins Co for comprehensive coverage wherein the insurance company undertook to indemnify him against loss or damage to the car a) by accidental collision ... b) by fire, external explosion, burglary, or theft, and c) malicious act. After a month, the car was carnapped while parked in the parking space in front of the Intercontinental Hotel in Makati. HL’s wife who was driving said car before it was carnapped reported immediately the incident to various government agencies in compliance with the insurance requirements. Because the car could not be recovered, HL filed a claim for the loss of the car with the insurance company but it was denied on the ground that his wife who was driving the car when it was carnapped was in the possession of an expired driver’s license, a violation of the “authorized driver” clause of the insurance company.
1) May the insurance company be held liable to indemnify HL for the loss of the insured vehicle? Explain.
2) Supposing that the car was brought by HL on installment basis and there were installments due and payable before the loss of the car as well as installments not yet payable. Because of the loss of the car, the vendor demanded from HL the unpaid balance of the promissory note. HL resisted the demand and claimed that he was only liable for the installments due and payable before the loss of the car but no longer liable for other installments not yet due at the time of the loss of the car. Decide. (1993 Bar Exams)
- Yes. The car was lost due to theft. What applies in this case is the “theft” clause, and not the “authorized driver” clause. It is immaterial that HL’s wife was driving the car with an expired driver’s license at the time it was carnapped. (Perla Compania de Seguros v CA 208 SCRA 487)
- The promissory note is not affected by whatever befalls the subject matter of the accessory contract. The unpaid balance on the promissory note should be paid and not only the installments due and payable before the loss of the car.
Sheryl insured her newly-acquired car, a Nissan Maxima against loss or damage from Php 50,000.00 with the XYZ Insurance Corp. (XYZ). Under the policy, the car must be driven only by an authorized driver who is either: (1) the insured, or (2) any person driving on the insured’s order or with his permission: provided that the person driving is permitted in accordance with the licensing or other laws or regulations to drive the motor vehicle and is not disqualified from driving such motor vehicle by order of a court.
During the effectivity of the policy, the car, then driven by Sheryl herself, who had no driver’s license, met an accident and was extensively damaged. The estimated cost of repair was Php 40,000.00. Sheryl immediately notified XYZ but the latter refused to pay on the policy alleging the she violated the terms thereof when she drove it without a driver’s license.
Is the insurer correct? (1991 Bar Examination)
No. The provision requiring the driver to be not in violation of any motor vehicle law applies only if the one driving the insured vehicle is other than the insured. Since Sheryl is the insured herself. The insurer is liable to pay her for the loss she suffered.
Mayari obtained a comprehensive insurance policy on his car. The policy carried the stand “authorized driver” clause which states that the insurance company is not liable for any loss, accident or damage sustained while the car is being driven by someone other than a duly authorize driver. Kaibigan had been driving for the past fives years but it appears that his driver’s license was irregularly because he cannot read or write; neither did he take any of the prescribed driver’s test. After the initial license was issued, merely asked his wife to go to the LTO to get the renewal of his license. Mayari did not know about the irregularity in the driver’s license of Kaibigan.
Can Mayari recover on the insurance policy? Explain. (1986 Bar Examination)
Mayari cannot recover under the policy since Kaibigan, at the time of the accident, did not qualify as an authorized driver. An irregular license is not a license at all.
Will the policy respond if the driver of the insured vehicle gets involved in an accident with an expired license?
It depends.
Yes. If the driver is the insured himself. While the motor vehicle law prohibits a person from operating a motor vehicle on the highway without a license or with an expired license, an infraction of the law on the part of the insured is not a bar to recovery under the insurance contract. It, however, renders him liable to the penal provisions of the motor vehicle law. (Palermo vs. Pyramid Insurance Co., Inc., 161 SCRA 677 [1988])
No. If the driver is other than the insured himself, the requirement that the driver must not be in violation of motor vehicle law applies. (Villacorta vs. Insurance Commission, 100 SCRA 467 [1980])
What the documents that could provide that the Authorized Drivers Clause was breached?
The following documents can help establish that the driver is under the influence of alcohol:
- Medico Legal Certificate
- Affidavits
- Blotter Report or Police Report
Entries in police records made by a police officer in the performance of the duty especially enjoined by law are prima facie evidence of the fact therein stated, and their probative value may be substantiated or nullified by other competent evidence. (Stronghold Insurance Company, Inc vs. Interpacific Container Services, GR No. 194328, July 1, 2015(
NO FAULT INDEMNITY
What is your understanding of a “no fault indemnity” clause found in an insurance policy? (1994 Bar Examination)
It shall answer for the payment of expenses incurred in an accident without the necessity of proving fault or negligence on the part of the insured.
As per Insurance Commission Memorandum Circular 04-2006, the total sum insured for No Fault Indemnity Clause was increased to Php 15,000.00 from Php 10,000.00.
In case of an accident, to whom shall the victim file a claim?
Occupant - The victim must file a claim against the insurer of the vehicle in which the occupant is riding, mounting or dismounting from. An occupant includes both the passenger and a third party so long as they are riding, mounting or dismounting from a motor vehicle. (Perla Compania De Seguros, Inc. vs. Ancheta, 164 SCRA 144 [1988])
Non-Occupant - The victim must file a claim against the insurer of the directly offending vehicle.
It shall answer for the payment of expenses incurred in an accident without the necessity of proving fault or negligence on the part of the insured.
As per Insurance Commission Memorandum Circular 04-2006, the total sum insured for No Fault Indemnity Clause was increased to Php 15,000.00 from Php 10,000.00.
In case of an accident, to whom shall the victim file a claim?
Occupant - The victim must file a claim against the insurer of the vehicle in which the occupant is riding, mounting or dismounting from. An occupant includes both the passenger and a third party so long as they are riding, mounting or dismounting from a motor vehicle. (Perla Compania De Seguros, Inc. vs. Ancheta, 164 SCRA 144 [1988])
Non-Occupant - The victim must file a claim against the insurer of the directly offending vehicle.
OWN DAMAGE AND THEFT
What are the risks/perils covered under the Own Damage and Theft Section?
It provides protection to the insured vehicle and its accessories and spare parts in case of loss or damage due to the following:
What is meant by Own Damage?
"Own damage" clause does not mean indemnification thereunder was made on the assumption that there was no wrongdoer or no third party at fault.
The phrase "own damage" as used in the insurance industry refers to the basis for its settlement of an insured's claim under the policy. It meant that the insurer assumed to reimburse the costs for repairing the damage to the insured vehicle. (Pan Malayan Insurance Corporation, Petitioner, Vs. Court of Appeals, Erlinda Fabie and Her Unknown Driver, Respondents, G.R. No. 81026 April 3, 1990)
What is meant by accidental collision?
"Accident" or "accidental" as used in insurance contracts have not acquired a technical meaning. It refers to an event mean that which takes place "without one's foresight or expectation, an event that proceeds from an unknown cause, or is an unusual effect of a known cause and, therefore, not expected.
It case of collision or overturning, it does not exclude events resulting in damage or loss due to the fault, recklessness or negligence of third parties. The concept "accident" is not necessarily synonymous with the concept of "no fault". It may be utilized simply to distinguish intentional or malicious acts from negligent or careless acts of man. (Pan Malayan Insurance Corporation, Petitioner, Vs. Court of Appeals, Erlinda Fabie and Her Unknown Driver, Respondents, G.R. No. 81026 April 3, 1990)
Is conviction required in order for an insurer to indemnify an insured under the Theft Clause?
No. The taking of the vehicle by another person without permission or authority from the insured is sufficient to place it within the ambit of the word theft as contemplated in the policy, and is therefore, compensable. The fact that one of the accused persons in the criminal case filed against those who took the jeep from the repair shop pleaded guilty to the charge of having unlawfully taken the insured vehicle did away with the necessity of a final disposition of the criminal case in order for plaintiff to recover under his insurance policy. (Malayan Insurance Co., Inc., Petitioner-Appellant, vs. The Honorable Court of Appeals and Aurelio Lacson, Respondents-Appellees, G.R. No. L-59919 November 26, 1986)
Does Theft cover include carnapping?
Carnapping is essentially the robbery or theft of a motorized vehicle, the concept of unlawful taking in theft, robbery and carnapping being the same. (People v. Fernandez, G.R. No. 132788, October 23, 2003; People v. Sia, 370 SCRA 123, 134 (2001); People v. Santos, 333 SCRA 319, 334 (2000).
The industry practice is that no carnapping claim shall be paid until the lapse of the 90 day recovery period. The rationale is that the insured can obtain a Certificate of Non-Recovery from the Highway Patrol Group of the Philippine National Police only after the lapse of the said period.
If the "theft" of a vehicle was committed by an employee, particularly driver of the insured who was instructed to bring the insured vehicle to nearby shop for a tune-up, compensable?
It would appear to be yes. The policy excludes only "malicious damage" to the insured vehicle and not to "malicious loss" of insured vehicle.
According to the Supreme Court, the words "loss" and "damage" mean different things in common ordinary usage. The word "loss" refers to the act or fact of losing, or failure to keep possession, while the word "damage" means deterioration or injury to property.
Therefore, an insurer cannot exclude the theft claim based on paragraph 4 of "Exceptions to Section III," since the same refers only to "malicious damage," or more specifically, "injury" to the motor vehicle caused by a person under the insured’s service. Paragraph 4 clearly does not contemplate "loss of property." (Alpha Insurance and Surety Co., Petitioner, Vs. Arsenia Sonia Castor, G.R. No. 198174, September 2, 2013)
Is the failure to return of the insured vehicle to the insured to a person to whom the vehicle was entrusted for repair ( or "Bailee") constitute theft under the policy?
Yes. While it is true that the insured voluntarily entrusted the possession of the insured vehicle to a Bailee for the purpose of adding accessories and improvements thereon, the Bailee failed to return the insured vehicle within the agreed three-day period.
The Bailee is deemed not to have acquired juridical possession over the insured vehicle. Consequently, the taking of insured vehicle by the Bailee is still considered without any consent or authority from the former. The failure of the Bailee to return or misappropriated the insured vehicle constitutes Qualified Theft. (Paramount Insurance Corporation vs Spouses Yves and Maria Teresa Remondeulaz, (G.R. No. 173773, November 28, 2012)
What is meant by juridical possession?
Juridical possession means a possession which gives the transferee a right over the thing which the transferee may set up even against the owner. This shall include but is not limited to donations, succession, and inscription of possessory information titles.
What if the insured vehicle was eventually returned to the insured, will it still be considered theft under the policy?
When one takes the motor vehicle of another without the latter’s consent even if the insured vehicle is later returned, there is theft – there being intent to gain as the use of the thing unlawfully taken constitutes gain. (People vs Bustinera, G.R. No. 148233, June 8, 2004, 431 SCRA 284, 297, citing Villacorta v. Insurance Commission, G.R. No. 54171, October 28, 1980, 100 SCRA 467.)
How is theft different from estafa?
The principal distinction between the two crimes is that in theft the thing is taken while in estafa the accused receives the property and converts it to his own use or benefit. However, there may be theft even if the accused has possession of the property. If he was entrusted only with the material or physical (natural) or de facto possession of the thing, his misappropriation of the same constitutes theft, but if he has the juridical possession of the thing his conversion of the same constitutes embezzlement or estafa.
The act of depriving the insured of the insured vehicle at, or soon after the transfer of physical possession of the movable property, constitutes theft under the insurance policy, which is compensable. (Paramount Insurance Corporation vs Spouses Yves and Maria Teresa Remondeulaz, (G.R. No. 173773, November 28, 2012)
What are the instances whereby the insured's claim can be denied?
What is malicious damage?
It refers to the damage that is the direct result from the deliberate or willful act of the insured, members of his family, and any person in the insured’s service, whose clear plan or purpose was to cause damage to the insured vehicle for purposes of defrauding the insurer.
However, it does not include theft of the insured vehicle. According to the Supreme Court, the words "loss" and "damage" mean different things in common ordinary usage. The word "loss" refers to the act or fact of losing, or failure to keep possession, while the word "damage" means deterioration or injury to property.
What is a deductible and how does it work?
The deductible in motor insurance refers to the share of the insured for each and every claim.
The rate per type of vehicle as prescribed by the Insurance Commission are as follows:
Deductible works in two (2) ways:
The objectives for the imposition of deductible are the following:
It provides protection to the insured vehicle and its accessories and spare parts in case of loss or damage due to the following:
- Accidental collision or overturning, collision or overturning consequent upon mechanical breakdown or consequent upon wear and tear;
- By fire, external explosion, self-ignition or lightning or burglary, housebreaking, or theft
- Malicious act
- Whilst in transit (including the processes of loading and unloading) incidental to such transit by road, rail, inland waterway, lift or elevator.
What is meant by Own Damage?
"Own damage" clause does not mean indemnification thereunder was made on the assumption that there was no wrongdoer or no third party at fault.
The phrase "own damage" as used in the insurance industry refers to the basis for its settlement of an insured's claim under the policy. It meant that the insurer assumed to reimburse the costs for repairing the damage to the insured vehicle. (Pan Malayan Insurance Corporation, Petitioner, Vs. Court of Appeals, Erlinda Fabie and Her Unknown Driver, Respondents, G.R. No. 81026 April 3, 1990)
What is meant by accidental collision?
"Accident" or "accidental" as used in insurance contracts have not acquired a technical meaning. It refers to an event mean that which takes place "without one's foresight or expectation, an event that proceeds from an unknown cause, or is an unusual effect of a known cause and, therefore, not expected.
It case of collision or overturning, it does not exclude events resulting in damage or loss due to the fault, recklessness or negligence of third parties. The concept "accident" is not necessarily synonymous with the concept of "no fault". It may be utilized simply to distinguish intentional or malicious acts from negligent or careless acts of man. (Pan Malayan Insurance Corporation, Petitioner, Vs. Court of Appeals, Erlinda Fabie and Her Unknown Driver, Respondents, G.R. No. 81026 April 3, 1990)
Is conviction required in order for an insurer to indemnify an insured under the Theft Clause?
No. The taking of the vehicle by another person without permission or authority from the insured is sufficient to place it within the ambit of the word theft as contemplated in the policy, and is therefore, compensable. The fact that one of the accused persons in the criminal case filed against those who took the jeep from the repair shop pleaded guilty to the charge of having unlawfully taken the insured vehicle did away with the necessity of a final disposition of the criminal case in order for plaintiff to recover under his insurance policy. (Malayan Insurance Co., Inc., Petitioner-Appellant, vs. The Honorable Court of Appeals and Aurelio Lacson, Respondents-Appellees, G.R. No. L-59919 November 26, 1986)
Does Theft cover include carnapping?
Carnapping is essentially the robbery or theft of a motorized vehicle, the concept of unlawful taking in theft, robbery and carnapping being the same. (People v. Fernandez, G.R. No. 132788, October 23, 2003; People v. Sia, 370 SCRA 123, 134 (2001); People v. Santos, 333 SCRA 319, 334 (2000).
The industry practice is that no carnapping claim shall be paid until the lapse of the 90 day recovery period. The rationale is that the insured can obtain a Certificate of Non-Recovery from the Highway Patrol Group of the Philippine National Police only after the lapse of the said period.
If the "theft" of a vehicle was committed by an employee, particularly driver of the insured who was instructed to bring the insured vehicle to nearby shop for a tune-up, compensable?
It would appear to be yes. The policy excludes only "malicious damage" to the insured vehicle and not to "malicious loss" of insured vehicle.
According to the Supreme Court, the words "loss" and "damage" mean different things in common ordinary usage. The word "loss" refers to the act or fact of losing, or failure to keep possession, while the word "damage" means deterioration or injury to property.
Therefore, an insurer cannot exclude the theft claim based on paragraph 4 of "Exceptions to Section III," since the same refers only to "malicious damage," or more specifically, "injury" to the motor vehicle caused by a person under the insured’s service. Paragraph 4 clearly does not contemplate "loss of property." (Alpha Insurance and Surety Co., Petitioner, Vs. Arsenia Sonia Castor, G.R. No. 198174, September 2, 2013)
Is the failure to return of the insured vehicle to the insured to a person to whom the vehicle was entrusted for repair ( or "Bailee") constitute theft under the policy?
Yes. While it is true that the insured voluntarily entrusted the possession of the insured vehicle to a Bailee for the purpose of adding accessories and improvements thereon, the Bailee failed to return the insured vehicle within the agreed three-day period.
The Bailee is deemed not to have acquired juridical possession over the insured vehicle. Consequently, the taking of insured vehicle by the Bailee is still considered without any consent or authority from the former. The failure of the Bailee to return or misappropriated the insured vehicle constitutes Qualified Theft. (Paramount Insurance Corporation vs Spouses Yves and Maria Teresa Remondeulaz, (G.R. No. 173773, November 28, 2012)
What is meant by juridical possession?
Juridical possession means a possession which gives the transferee a right over the thing which the transferee may set up even against the owner. This shall include but is not limited to donations, succession, and inscription of possessory information titles.
What if the insured vehicle was eventually returned to the insured, will it still be considered theft under the policy?
When one takes the motor vehicle of another without the latter’s consent even if the insured vehicle is later returned, there is theft – there being intent to gain as the use of the thing unlawfully taken constitutes gain. (People vs Bustinera, G.R. No. 148233, June 8, 2004, 431 SCRA 284, 297, citing Villacorta v. Insurance Commission, G.R. No. 54171, October 28, 1980, 100 SCRA 467.)
How is theft different from estafa?
The principal distinction between the two crimes is that in theft the thing is taken while in estafa the accused receives the property and converts it to his own use or benefit. However, there may be theft even if the accused has possession of the property. If he was entrusted only with the material or physical (natural) or de facto possession of the thing, his misappropriation of the same constitutes theft, but if he has the juridical possession of the thing his conversion of the same constitutes embezzlement or estafa.
The act of depriving the insured of the insured vehicle at, or soon after the transfer of physical possession of the movable property, constitutes theft under the insurance policy, which is compensable. (Paramount Insurance Corporation vs Spouses Yves and Maria Teresa Remondeulaz, (G.R. No. 173773, November 28, 2012)
What are the instances whereby the insured's claim can be denied?
- Any malicious damage caused by the Insured, any member of his family or by a person in the Insured’s service.
- Consequential loss, depreciation, wear and tear, mechanical or electrical breakdowns, failures or breakages.
- Damage to tires, unless the Scheduled Vehicle is damaged at the same time.
- The claim is within deductible.
What is malicious damage?
It refers to the damage that is the direct result from the deliberate or willful act of the insured, members of his family, and any person in the insured’s service, whose clear plan or purpose was to cause damage to the insured vehicle for purposes of defrauding the insurer.
However, it does not include theft of the insured vehicle. According to the Supreme Court, the words "loss" and "damage" mean different things in common ordinary usage. The word "loss" refers to the act or fact of losing, or failure to keep possession, while the word "damage" means deterioration or injury to property.
What is a deductible and how does it work?
The deductible in motor insurance refers to the share of the insured for each and every claim.
The rate per type of vehicle as prescribed by the Insurance Commission are as follows:
- Private Car – 0.5% of the Insured vehicle’s fair market value or Php 2,000.00, whichever is higher.
- Commercial Vehicle – 1% of the Insured vehicle’s fair market value or Php 3,000.00, whichever is higher.
Deductible works in two (2) ways:
- If the amount exceeds the deductible, it serves as the share of the insured in the loss. For example, Don Pepot owns a Lamborghini Aventador whose value is Php40M. Based on the above, the deductible shall be Php200,000. If the event he will figure in vehicular accident and cost of repair is Php200,001, the liability of the insurer is only Php1.00 only.
- If the amount does not exceed the deductible, it serves as a bar to recovery. Consequently, if the cost to repair Don Pepot's Lamborghini Aventador is Php199,000, Don Pepot will have to shoulder 100% of the amount of loss because it is below deductible.
The objectives for the imposition of deductible are the following:
- To eliminate nuisance or petty claims.
- To compel the insured to exercise extra care in the use of the insured vehicle as if he/she is not insured at all.
EXCESS BODILY INJURY
What are the benefits under Excess Bodily Injury Cover?
Third Party Excess Death/Bodily Injury Cover or Excess BI – Unlike the CTPL, it is a lump sum benefit and not subject to a Schedule of Indemnities.
When will Excess BI be triggered?
a. The limits under Section I and II are exhausted.
b. If the loss exceeds the limit under Section 377 of the Insurance Code in the event no coverage exist as described in the preceding paragraph.
How do you compute loss of income in case of a death claim?
Third Party Excess Death/Bodily Injury Cover or Excess BI – Unlike the CTPL, it is a lump sum benefit and not subject to a Schedule of Indemnities.
When will Excess BI be triggered?
a. The limits under Section I and II are exhausted.
b. If the loss exceeds the limit under Section 377 of the Insurance Code in the event no coverage exist as described in the preceding paragraph.
How do you compute loss of income in case of a death claim?
- In considering the earning capacity of the victim as an element of damages, the following factors are considered in determining the compensable amount of lost earnings: (1) the number of years for which the victim would otherwise have lived; and (2) the rate of loss sustained by the heirs of the deceased. Jurisprudence provides that the first factor, i.e., life expectancy, is computed by applying the formula (2/3 x [80 - age at death]) adopted in the American Expectancy Table of Mortality or the Actuarial Combined Experience Table of Mortality. As to the second factor, it is computed by multiplying the life expectancy by the net earnings of the deceased, i.e., the total earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses. The net earning is ordinarily computed at fifty percent (50%) of the gross earnings. Thus, the formula used by this Court in computing loss of earning capacity is: Net Earning Capacity = [2/3 x (80 – age at time of death) x (gross annual income – reasonable and necessary living expenses)]. (Nelen Lambert , assisted by her husband, Glenroy Aloysuis Lambert vs. Heirs of Ray Castillon, G.R. No. 160709, [February 23, 2005])
- In the case of moral damages, while it is true that there can be no exact or uniform rule for measuring the value of human life and the measure of damages cannot be arrived at by a precise mathematical calculation, the prevailing jurisprudence is Php50,000. (People v. Hapa, 413 Phil. 679, 699-700 [2001])
THIRD PARTY PROPERTY DAMAGE
What is Third Party Property Damage Cover or TPPD?
It is a lump sum benefit which shall answer for any liability arising from the damage to a third party’s vehicle or other properties.
Will the TPPD Cover respond if the vehicle being driven by the insured not owned by Insured causes damage to another vehicle?
It depends. If it is a private car, the claim will be paid. Under Section IV of the Private Car Motor Insurance Policy, "the Scheduled Vehicle shall include any private car while being personally driven by the Insured not belonging to him and not hired to him under a hire purchase agreement."
Will the TPPD Cover respond to cover the cost of repair or damage to the vehicle being driven by the insured that is not owned by him?
No. Section IV provides that the insured shall not be liable "in respect of damage to the property belonging to the Insured, held in trust by, or in the custody or control of the Insured or any member of the Insured's household, or being conveyed by the Scheduled Vehicle."
The said car borrowed by the Insured is considered as a property held in trust by or in the custody or control of the Insured.
What are rules in determining liability in case of a collision?
The New Civil Code provides the following presumptions:
The Supreme Court has promulgated the following presumptions:
A presumption is defined as an inference as to the existence of a fact not actually known, arising from its usual connection with another which is known, or from a conjecture based on past experience as to what course human affairs ordinarily take. (Robert Consunji . A car and a motorbike get into an accident. Who will be accountable? Top Gear Philippines. April 19, 2018). Again, the insured can always provide evidence to refute the presumption.
It is a lump sum benefit which shall answer for any liability arising from the damage to a third party’s vehicle or other properties.
Will the TPPD Cover respond if the vehicle being driven by the insured not owned by Insured causes damage to another vehicle?
It depends. If it is a private car, the claim will be paid. Under Section IV of the Private Car Motor Insurance Policy, "the Scheduled Vehicle shall include any private car while being personally driven by the Insured not belonging to him and not hired to him under a hire purchase agreement."
Will the TPPD Cover respond to cover the cost of repair or damage to the vehicle being driven by the insured that is not owned by him?
No. Section IV provides that the insured shall not be liable "in respect of damage to the property belonging to the Insured, held in trust by, or in the custody or control of the Insured or any member of the Insured's household, or being conveyed by the Scheduled Vehicle."
The said car borrowed by the Insured is considered as a property held in trust by or in the custody or control of the Insured.
What are rules in determining liability in case of a collision?
The New Civil Code provides the following presumptions:
- Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if, at the time of the mishap, he was violating any traffic regulation (Article 2185); and
- It is disputably presumed that a driver was negligent, if he had been found guilty of reckless driving or of violating traffic regulations at least twice within the next preceding two months (Article 2184).
The Supreme Court has promulgated the following presumptions:
- The doctrine of last clear chance. It provides that where both parties are negligent but the negligent act of one is appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused the loss, the one who had the last clear opportunity to avoid the loss but failed to do so is chargeable with the loss;
- The doctrine or rule of evidence of res ipsa loquitur (or “the thing speaks for itself ” in Latin)> It arises only if the thing that had caused the incident was under the defendant’s control, the incident could happen only as a result of a careless act, and the plaintiff’s behavior did not contribute to the incident; and
- That drivers of vehicles who bump the rear of another vehicle are presumed to be the cause of the accident, unless contradicted by other evidence.
A presumption is defined as an inference as to the existence of a fact not actually known, arising from its usual connection with another which is known, or from a conjecture based on past experience as to what course human affairs ordinarily take. (Robert Consunji . A car and a motorbike get into an accident. Who will be accountable? Top Gear Philippines. April 19, 2018). Again, the insured can always provide evidence to refute the presumption.
CLAIMS
What are the steps to be taken in case of an accident?
What are the minimum documents needed to expedite the processing of claim?
I. Bodily injury claim
II. Death Claim
III. Own Damage Claim
IV. Third Party Property Damage
V. Theft/Carnapping
- Notify your insurer and/or your agent or broker immediately for immediate assistance. In the alternative, you may contact your insurer's roadside assistance hotline, if available.
- Take pictures of your car and the third party's car, if applicable, using your smartphone. This is important in determining who is the party at fault.
- Get the personal details of the third party and witnesses, if applicable, such as their name, address, phone or mobile number and driver's license or any government ID.
- Safeguard your vehicle to prevent further loss or damage.
- Do not assume liability without the written consent of your insurer. Doing so will prejudice your right to claim against the policy. It is duty of the insured to preserve the right of recovery of the insurer against the party at fault.
- Submit the required documents depending on the nature of claim as discussed below.
What are the minimum documents needed to expedite the processing of claim?
I. Bodily injury claim
- Affidavit or Statement of Claim - who is driving the vehicle at the time of the accident? Where, what day and time did the loss happen? Is there a third party involved?
- Drivers License of the insured
- Identity of the third party claimants
- Police report
- Medical Certificate of the claimant
- Original receipts for the medical expenses incurred by the claimant
- Income Tax Return for loss of income
II. Death Claim
- Affidavit or Statement of Claim - who is driving the vehicle at the time of the accident? Where, what day and time did the loss happen? Is there a third party involved?
- Proof of identity of the claimant/heir of the deceased such as valid government IDs.
- Proof of filiation of the claimant/heir of the deceased such as Birth Certificate or Marriage Certificate
- Drivers License of the insured
- Police report
- Death Certificate
- Original receipts for funeral and related expenses
- Income Tax Return for loss of income
III. Own Damage Claim
- Affidavit or Statement of Claim - who is driving the vehicle at the time of the accident? Where, what day and time did the loss happen?
- Police report
- OR/CR
- Drivers License of the insured or the authorized driver.
- Repair estimate from accredited repair shops
- Photographs of the damage portion of vehicle showing the plate number
IV. Third Party Property Damage
- Affidavit or Statement of Claim of the third party and the insured.
- Sketch showing the location and position of the vehicles at the time of collision. This is important in determining who is the party at fault.
- Police report
- OR/CR
- Identity of the third party claimants.
- Drivers License of the third party claimant or his authorized driver at the time of accident.
- Photographs of the damaged portion of the vehicle showing the plate number or the property owned by the third party claimant.
- Repair estimate for both vehicles from the insurer's accredited repair shops.
- Certificate of No Claim from the Third Party.
V. Theft/Carnapping
- Affidavit or Statement of claims - who is driving the vehicle at the time of the accident? Where, what day and time did the loss happen?
- Complaint Sheet file with the Traffic Management Group
- Alarm Sheet filed with the Traffic Management Group
- Certificate of Nationwide Alarm
- Certificate of Non-Recovery from the Traffic Management Group
THE DATA CONTAINED IN THIS SITE ARE FOR GENERAL INFORMATIONAL PURPOSES ONLY. THE ADVICE OF A PROFESSIONAL INSURANCE INTERMEDIARY AND COUNSEL SHOULD ALWAYS BE OBTAINED.
THE INFORMATION CONTAINED HEREIN HAS BEEN COMPILED FROM SOURCES BELIEVED TO BE RELIABLE. NO WARRANTY, GUARANTEE, OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, IS MADE AS TO THE CORRECTNESS OR SUFFICIENCY OF ANY REPRESENTATION CONTAINED HEREIN.
THE INFORMATION CONTAINED HEREIN HAS BEEN COMPILED FROM SOURCES BELIEVED TO BE RELIABLE. NO WARRANTY, GUARANTEE, OR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, IS MADE AS TO THE CORRECTNESS OR SUFFICIENCY OF ANY REPRESENTATION CONTAINED HEREIN.