Article 77p. 77

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

by the Commissioner or make a cash deposit in such

amount as herein required as limit of liability for purposes

specified in Section 387.

(a) In the case of a land transportation operator, the

insurance guaranty in cash or surety bond shall cover

liability for death or bodily injuries of third-parties and/or

passengers arising out of the use of such vehicle in the

amount not less than Twelve thousand pesos (P12,000.00)

per passenger or third-party and an amount, for each of

such categories, in any one accident of not less than that

set forth in the following scale:

(1) Motor vehicles with an authorized capacity of

twenty-six (26) or more passengers: Fifty thousand pesos

(P50,000.00);

(2) Motor vehicles with an authorized capacity of from

twelve (12) to twenty-five (25) passengers: Forty thousand

pesos (P40,000.00);

(3) Motor vehicles with an authorized capacity of from

six (6) to eleven (11) passengers: Thirty thousand pesos

(P30,000.00);

(4) Motor vehicles with an authorized capacity of five

(5) or less passengers: Five thousand pesos (P5,000.00)

multiplied by the authorized capacity.

Provided, however , That such cash deposit made to,

or surety bond posted with, the Commissioner shall be

resorted to by him in cases of accidents the indemnities

for which to third-parties and/or passengers are not

settled accordingly by the land transportation operator

and,

in

that

event,

the

said

cash deposit shall be

replenished or such surety bond shall be restored within

sixty (60) days after impairment or expiry, as the case may

be, by such land transportation operator, otherwise, he

shall secure the insurance policy required by this chapter.

The aforesaid cash deposit may be invested by the

Commissioner in readily marketable government bonds,

and/or securities.

(b) In the case of an owner of a motor vehicle, the

insurance or guaranty in cash or surety bond shall cover

liability for death or injury to third-parties in an amount

not less than that set forth in the following scale in any

one accident:

(1) Private Cars

(i) Bantam: Twenty thousand pesos (P20,000.00);

(ii) Light: Twenty thousand pesos (P20,000.00); and

(iii) Heavy: Thirty thousand pesos (P30,000.00).

(2) Other Private Vehicles

(i)

Tricycles,

motorcycles

and

scooters:

Twelve

thousand pesos (P12,000.00);

(ii) Vehicles with an unladen weight of 2,600 kilos or

less: Twenty thousand pesos (P20,000.00);

(iii) Vehicles with an unladen weight of between 2,601

kilos and 3,930 kilos: Thirty thousand pesos (P30,000.00);

and

(iv) Vehicles with an unladen weight over 3,930 kilos:

Fifty thousand pesos (P50,000.00).

The

Commissioner

may,

if

warranted,

set

forth

schedule of indemnities for the payment of claims for

death or bodily injuries with the coverages set forth

herein.

SECTION 391. Any claim for death or injury to any

passenger or third-party pursuant to the provisions of this

chapter shall be paid without the necessity of proving

fault

or

negligence

of

any

kind:

Provided, That for

purposes of this section:

(a) The total indemnity in respect of any person shall

not be less than Fifteen thousand pesos (P15,000.00);

(b) The following proofs of loss, when submitted

under oath, shall be sufficient evidence to substantiate

the claim:

(1) Police report of accident; and

(2)

Death

certificate

and

evidence

sufficient

to

establish the proper payee; or

(3) Medical report and evidence of medical or hospital

disbursement in respect of which refund is claimed;

(c) Claim may be made against one motor vehicle

only. In the case of an occupant of a vehicle, claim shall lie

against the insurer of the vehicle in which the occupant is

riding, mounting or dismounting from. In any other case,

claim shall lie against the insurer of the directly offending

vehicle. In all cases, the right of the party paying the claim

to recover against the owner of the vehicle responsible for

the accident shall be maintained.

SECTION 392. No land transportation operator or

owner of motor vehicle shall be unreasonably denied the

policy of insurance or surety bond required by this

chapter by the insurance companies authorized to issue

the same, otherwise, the Land Transportation Office shall

require from said land transportation operator or owner

of the vehicle, in lieu of a policy of insurance or surety

bond, a certificate that a cash deposit has been made

with the Commissioner in such amount required as limits

of indemnity in Section 390 to answer for the passenger

and/or third-party liability of such land transportation

operator or owner of the vehicle.

No

insurance

company

may issue the policy of

insurance or surety bond required under this chapter

unless so authorized under existing laws.

The authority to engage in the casualty and/or surety

lines of business of an insurance company that refuses to

issue or renew, without just cause, the insurance policy or

surety

bond

therein

required

shall

be

withdrawn

immediately.

SECTION 393. No cancellation of the policy shall be

valid unless written notice thereof is given to the land

transportation operator or owner of the vehicle and to the

Land Transportation Office at least fifteen (15) days prior

to the intended effective date thereof. Upon receipt of

such notice, the Land Transportation Office, unless it

receives evidence of a new valid insurance or guaranty in

cash or surety bond as prescribed in this chapter, or an

endorsement of revival of the cancelled one, shall order

the immediate confiscation of the plates of the motor

vehicle covered by such cancelled policy. The same may

be reissued only upon presentation of a new insurance

policy or that a guaranty in cash or surety bond has been

made or posted with the Commissioner and which meets

the requirements of this chapter, or an endorsement or

revival of the cancelled one.

SECTION 394. If the cancellation of the policy or

surety bond is contemplated by the land transportation

operator or owner of the vehicle, he shall, before the

policy or surety bond ceases to be effective, secure a

similar policy of insurance or surety bond to replace the

policy or surety bond to be cancelled or make a cash

deposit in sufficient amount with the Commissioner, and

without any gap, file the required documentation with

the Land Transportation Office, and notify the insurance

company concerned of the cancellation of its policy or

surety bond.

SECTION 395. In case of change of ownership of a

motor vehicle, or change of the engine of an insured

vehicle, there shall be no need of issuing a new policy

until

the

next

date

of

registration

or

renewal

of

registration of such vehicle, and: Provided, That the

insurance company shall agree to continue the policy,

such change of ownership or such change of the engine

shall be indicated in a corresponding endorsement by the

insurance company concerned, and a signed duplicate of

such endorsement shall, within a reasonable time, be

filed with the Land Transportation Office.

SECTION 396. In the settlement and payment of

claims, the indemnity shall not be availed of by any

accident

victim

or

claimant

as

an

instrument

of

enrichment by reason of an accident, but as an assistance

or restitution insofar as can fairly be ascertained.

© Compiled by RGL

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