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UCPB General Insurance Vs MasaganaTelamart 308 SCRA 259

The document summarizes an insurance dispute between an insurer and insured over whether fire insurance policies had been renewed or expired at the time of a fire. The insurer had issued policies to the insured covering various properties, but did not renew the policies after their expiration. After the policies expired and a fire occurred, the insured attempted to pay the premiums for renewal. The court held that under Philippine law, insurance policies are not valid or binding until the actual payment of premiums, so the policies had expired before the fire since payment was made afterwards.

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212 views1 page

UCPB General Insurance Vs MasaganaTelamart 308 SCRA 259

The document summarizes an insurance dispute between an insurer and insured over whether fire insurance policies had been renewed or expired at the time of a fire. The insurer had issued policies to the insured covering various properties, but did not renew the policies after their expiration. After the policies expired and a fire occurred, the insured attempted to pay the premiums for renewal. The court held that under Philippine law, insurance policies are not valid or binding until the actual payment of premiums, so the policies had expired before the fire since payment was made afterwards.

Uploaded by

rengie
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Premium

Payment of premium by installments

UCPB General Insurance vs MasaganaTelamart 308 SCRA 259

FACTS:

Insurer issued 5 fire insurance policies covering various properties of the Insured (covering the period May 22,
1991-May 22, 1992). Before the expiration of the policy (March 1992), Insurer evaluated the policy and
decided not to renew them. Thus, Insurer issued a notice of non-renewal to Insured’s broker Zuellig (on April
1992). After the expiration of the policy (or on June 13, 2012), fire razed Insured’s property covered by 3
policies. A month later, Insured presented 5 checks to the Insurer’s cashier as payment for the renewal of the
policy (from May 1192-May 1993), however, no notice of loss was ever filed by Insured. Insurer refused to pay
on the ground that the policies had already expired and were not renewed, and that the fire occurred before
payment of the premium (for renewal). RTC Insured fully complied with its duty to pay premium.

CA following previous practice, Insured was allowed a 60-90 day credit term for the renewal of its policy, and
that the acceptance of the late premium payment suggested an understanding that payment could be made
later, and that no timely notice of non-renewal was sent.

ISSUE:

Whether the fire insurance policies issued by Insurer to Insured had expired on May 1992 or had been
extended or renewed by an implied credit arrangement even though actual tender of payment was made after
the occurrence of the fire.

HELD:

No. The insurance policies had not been renewed.

An insurance policy, other than life, issued originally or on renewal, is not valid and binding until actual
payment of the premium. Any agreement to the contrary is void. 

 The parties may not agree expressly or impliedly on the extension of creditor time to pay the premium and
consider the policy binding before actual payment.

Here, the payment of the premium for renewal of the policies was tendered on July 13, 1992, a month after
the fire occurred on June 13, 1992. The assured did not even give the insurer a notice of loss within a
reasonable time after occurrence of the fire.

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