REVIEWER: TYPES OF INSURANCE
1. FIRE INSURANCE (Secs. 167–173)
Definition:
Covers loss or damage caused by fire and allied perils (e.g., lightning, explosion,
earthquake, typhoon, flood if stated).
Key Points:
● Notice of loss must be given immediately.
● May be valued or open.
● Subrogation applies when loss is caused by a third party.
● Misrepresentation/concealment voids the policy.
2. MARINE INSURANCE (Secs. 99–180)
Definition:
Covers loss or damage involving ships, cargo, freight, and maritime perils.
Key Coverage Areas:
● Vessel (Hull)
● Cargo
● Freightage (transport income)
● Profits
Key Doctrines:
● Implied warranties: Seaworthiness, legality of voyage.
● Abandonment: Allowed in constructive total loss.
● Particular vs. General Average: General = shared loss from voluntary sacrifice.
3. LIFE INSURANCE (Secs. 181–186)
Definition:
Provides payment upon the death of the insured, or maturity of a period (e.g., endowment).
Key Points:
● Insurable interest must exist only at policy inception.
● Incontestability clause after 2 years (Sec. 48).
● Can be individual or group.
● Beneficiaries can be revocable or irrevocable.
4. INDUSTRIAL LIFE INSURANCE (Secs. 270–276)
Definition:
A form of life insurance with small face value and weekly premiums collected by agents.
Purpose:
Designed for low-income earners with simple issuance.
5. GROUP LIFE INSURANCE (Secs. 228–231)
Definition:
Covers a group (usually employees) under a single master policy.
Key Features:
● Employer = policyholder, employee = insured.
● Usually no medical exam required.
● Conversion to individual policy allowed upon separation.
6. CASUALTY INSURANCE (Sec. 176)
Definition:
Covers losses from accidents, liabilities, and non-fire/non-marine perils.
Examples:
● Motor vehicle liability
● Burglary/theft
● Personal accident
● Workmen’s compensation
Note:
Personal accident and health insurance can fall under this if issued by a non-life insurer.
7. SURETYSHIP (Secs. 175–180)
Definition:
A contract where one party (surety) guarantees the performance of another (principal) to a
third party (obligee).
Key Concepts:
● Three-party agreement
● Used in construction, court bonds, etc.
● Surety's liability is joint and several with the principal.
8. MICROINSURANCE (Sec. 187)
Definition:
Low-cost insurance for low-income individuals.
Limits:
● Daily premium: ≤ 7.5% of minimum daily wage (Metro Manila)
● Max benefit: ≤ 1,000× that wage
Examples:
● Crop or livelihood protection
● Death and burial benefit insurance
9. ACCIDENT & HEALTH INSURANCE (Non-Life Companies)
Definition:
Issued by non-life insurers to cover:
● Personal accident
● Medical expense reimbursement
● Disability/income protection
Note:
If issued by a life insurance company, it's classified under life insurance.
10. MOTOR VEHICLE LIABILITY INSURANCE (Secs. 373–383)
Definition:
Compulsory insurance covering death or injury to third parties from motor vehicle use.
Key Feature:
● No-Fault Clause (Sec. 378): Insurer pays up to P15,000 for death/injury regardless of
fault.
11. REINSURANCE (Sec. 96)
Definition:
Insurance for insurers — an insurer transfers part of its risk to another insurer.
Key Notes:
● Insured has no direct interest in this contract.
● Helps insurers manage large risks.
