Article 46p. 46

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

SECTION 161. In case of a valued policy of marine

insurance on freightage or cargo, if a part only of the

subject is exposed to risk, the valuation applies only in

proportion to such part.

SECTION 162. When profits are valued and insured by

a

contract

of

marine

insurance,

a

loss

of

them is

conclusively presumed from a loss of the property out of

which they are expected to arise, and the valuation fixes

their amount.

SECTION 163. In estimating a loss under an open

policy of marine insurance the following rules are to be

observed:

(a) The value of a ship is its value at the beginning of

the risk, including all articles or charges which add to its

permanent value or which are necessary to prepare it for

the voyage insured;

(b) The value of the cargo is its actual cost to the

insured, when laden on board, or where the cost cannot

be ascertained, its market value at the time and place of

lading, adding the charges incurred in purchasing and

placing it on board, but without reference to any loss

incurred in raising money for its purchase, or to any

drawback on its exportation, or to the fluctuation of the

market at the port of destination, or to expenses incurred

on the way or on arrival;

(c) The value of freightage is the gross freightage,

exclusive of primage, without reference to the cost of

earning it; and

(d) The cost of insurance is in each case to be added

to the value thus estimated.

SECTION 164. If cargo insured against partial loss

arrives at the port of destination in a damaged condition,

the loss of the insured is deemed to be the same

proportion of the value which the market price at that

port, of the thing so damaged, bears to the market price

it would have brought if sound.

SECTION 165. A marine insurer is liable for all the

expenses attendant upon a loss which forces the ship into

port to be repaired; and where it is stipulated in the policy

that the insured shall labor for the recovery of the

property, the insurer is liable for the expense incurred

thereby, such expense, in either case, being in addition to

a total loss, if that afterwards occurs.

SECTION 166. A marine insurer is liable for a loss

falling

upon

the

insured, through a contribution in

respect to the thing insured, required to be made by him

towards a general average loss called for by a peril

insured against: Provided, That the liability of the insurer

shall

be

limited

to

the

proportion

of

contribution

attaching to his policy value where this is less than the

contributing value of the thing insured.

SECTION 167. When a person insured by a contract of

marine

insurance

has a demand against others for

contribution, he may claim the whole loss from the

insurer, subrogating him to his own right to contribution.

But no such claim can be made upon the insurer after

the separation of the interests liable to contribution, nor

when the insured, having the right and opportunity to

enforce

contribution

from

others,

has

neglected

or

waived the exercise of that right.

SECTION 168. In the case of a partial loss of ship or its

equipment, the old materials are to be applied towards

payment for the new. Unless otherwise stipulated in the

policy, a marine insurer is liable for only two-thirds (2/3) of

the remaining cost of repairs after such deduction, except

that anchors must be paid in full.

TITLE 2 Fire Insurance

SECTION 169. As used in this Code, the term fire

insurance shall include insurance against loss by fire,

lightning, windstorm, tornado or earthquake and other

allied risks, when such risks are covered by extension to

fire insurance policies or under separate policies.

SECTION 170. An alteration in the use or condition of a

thing insured from that to which it is limited by the policy

made without the consent of the insurer, by means

within the control of the insured, and increasing the risks,

entitles an insurer to rescind a contract of fire insurance.

SECTION 171. An alteration in the use or condition of a

thing insured from that to which it is limited by the policy,

which does not increase the risk, does not affect a

contract of fire insurance.

SECTION 172. A contract of fire insurance is not

affected by any act of the insured subsequent to the

execution

of

the

policy,

which

does

not

violate its

provisions, even though it increases the risk and is the

cause of the loss.

SECTION 173. If there is no valuation in the policy, the

measure of indemnity in an insurance against fire is the

expense it would be to the insured at the time of the

commencement of the fire to replace the thing lost or

injured in the condition in which it was at the time of the

injury; but if there is a valuation in a policy of fire

insurance, the effect shall be the same as in a policy of

marine insurance.

SECTION 174. Whenever the insured desires to have a

valuation named in his policy, insuring any building or

structure against fire, he may require such building or

structure to be examined by an independent appraiser

and the value of the insured's interest therein may then

be fixed as between the insurer and the insured. The cost

of such examination shall be paid for by the insured. A

clause

shall

be

inserted

in

such

policy

stating

substantially that the value of the insured's interest in

such building or structure has been thus fixed. In the

absence of any change increasing the risk without the

consent of the insurer or of fraud on the part of the

insured, then in case of a total loss under such policy, the

whole amount so insured upon the insured's interest in

such building or structure, as stated in the policy upon

which the insurers have received a premium, shall be

paid, and in case of a partial loss the full amount of the

partial loss shall be so paid, and in case there are two (2)

or more policies covering the insured's interest therein,

each policy shall contribute pro rata to the payment of

such whole or partial loss. But in no case shall the insurer

be required to pay more than the amount thus stated in

such policy. This section shall not prevent the parties

from

stipulating

in

such

policies

concerning

the

repairing,

rebuilding

or

replacing

of

buildings

or

structures wholly or partially damaged or destroyed.

SECTION 175. No policy of fire insurance shall be

pledged, hypothecated, or transferred to any person, firm

or

company

who

acts

as

agent

for

or

otherwise

represents the issuing company, and any such pledge,

hypothecation, or transfer hereafter made shall be void

and of no effect insofar as it may affect other creditors of

the insured.

TITLE 3 Casualty Insurance

SECTION

176.

Casualty

insurance

is

insurance

covering loss or liability arising from accident or mishap,

excluding certain types of loss which by law or custom are

considered as falling exclusively within the scope of other

types of insurance such as fire or marine. It includes, but

is not limited to, employer's liability insurance, motor

vehicle liability insurance, plate glass insurance, burglary

and

theft

insurance,

personal

accident

and

health

insurance as written by non-life insurance companies,

and other substantially similar kinds of insurance.

TITLE 4 Suretyship

SECTION

177.

A

contract

of

suretyship

is

an

agreement whereby a party called the surety guarantees

the performance by another party called the principal or

obligor of an obligation or undertaking in favor of a third

party called the obligee. It includes official recognizances,

stipulations,

bonds

or

undertakings

issued

by

any

© Compiled by RGL

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