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    Gulf Resorts, Inc., vs. Philippine Charter Insurance Corporation

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    Regina Asejo
    The Supreme Court ruled that the insurance policy between Gulf Resorts and Philippine Charter Insurance covered only the two swimming pools for damage from earthquakes. The Court examined the policy and found that Gulf Resorts had only paid a premium of P393 for earthquake coverage on the swimming pools, as with previous policies from another insurer. As no other premium was paid for earthquake coverage on other properties, the policy did not cover damage to those other properties from the 1990 earthquake. The Court found no ambiguity in the clear intent shown by the policy terms and premiums paid.

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    Gulf Resorts, Inc., vs. Philippine Charter Insurance Corporation

    Uploaded by

    Regina Asejo
    18 views8 pages
    The Supreme Court ruled that the insurance policy between Gulf Resorts and Philippine Charter Insurance covered only the two swimming pools for damage from earthquakes. The Court examined the policy and found that Gulf Resorts had only paid a premium of P393 for earthquake coverage on the swimming pools, as with previous policies from another insurer. As no other premium was paid for earthquake coverage on other properties, the policy did not cover damage to those other properties from the 1990 earthquake. The Court found no ambiguity in the clear intent shown by the policy terms and premiums paid.

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    The Supreme Court ruled that the insurance policy between Gulf Resorts and Philippine Charter Insurance covered only the two swimming pools for damage from earthquakes. The Court examined the policy and found that Gulf Resorts had only paid a premium of P393 for earthquake coverage on the swimming pools, as with previous policies from another insurer. As no other premium was paid for earthquake coverage on other properties, the policy did not cover damage to those other properties from the 1990 earthquake. The Court found no ambiguity in the clear intent shown by the policy terms and premiums paid.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    18 views8 pages

    Gulf Resorts, Inc., vs. Philippine Charter Insurance Corporation

    Uploaded by

    Regina Asejo
    The Supreme Court ruled that the insurance policy between Gulf Resorts and Philippine Charter Insurance covered only the two swimming pools for damage from earthquakes. The Court examined the policy and found that Gulf Resorts had only paid a premium of P393 for earthquake coverage on the swimming pools, as with previous policies from another insurer. As no other premium was paid for earthquake coverage on other properties, the policy did not cover damage to those other properties from the 1990 earthquake. The Court found no ambiguity in the clear intent shown by the policy terms and premiums paid.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 8

    GULF RESORTS, INC., vs.

    PHILIPPINE
    CHARTER INSURANCE CORPORATION

    [G.R. No. 156167. May 16, 2005]


    FACTS:
     Gulf Resorts is the owner of the Plaza Resort situated at Agoo, La Union and
    had its properties in said resort insured originally with the American Home
    Assurance Company (AHAC).
     In the first 4 policies issued, the risks of loss from earthquake shock was
    extended only to petitioner’s 2 swimming pools.
     Gulf Resorts agreed to insure with Phil Charter the properties covered by the
    AHAC policy provided that the policy wording and rates in said policy be
    copied in the policy to be issued by Phil Charter.
     Phil Charter issued Policy No. 31944 to Gulf Resorts covering the period of
    March 14, 1990 to March 14, 1991 for P10,700,600.00 for a total premium of
    P45,159.92.
     The break-down of premiums shows that Gulf Resorts paid only P393.00 as
    premium against earthquake shock (ES).
    FACTS:
     In Policy No. 31944 issued by defendant, the shock endorsement provided that “In
    consideration of the payment by the insured to the company of the sum included
    additional premium the Company agrees, notwithstanding what is stated in the
    printed conditions of this policy due to the contrary, that this insurance covers loss
    or damage to shock to any of the property insured by this Policy occasioned by or
    through or in consequence of earthquake . In Exhibit "7-C" the word "included"
    above the underlined portion was deleted.
     On July 16, 1990 an earthquake struck Central Luzon and Northern Luzon
    and plaintiff’s properties covered by Policy No. 31944 issued by defendant,
    including the two swimming pools in its Agoo Playa Resort were damaged.
     Petitioner advised respondent that it would be making a claim under its Insurance
    Policy 31944 for damages on its properties.
     Respondent denied petitioner’s claim on the ground that its insurance policy only
    afforded earthquake shock coverage to the two swimming pools of the resort.
    TRIAL COURT:
    It ruled in favor of respondent. In its ruling, the schedule
    clearly shows that petitioner paid only a premium of
    P393.00 against the peril of earthquake shock, the same
    premium it had paid against earthquake shock only on
    the two swimming pools in all the policies issued by
    AHAC.
    CA affirmed the decision of the RTC in toto.
    ISSUE:
    Whether or not the policy covers only the two swimming
    pools owned by Gulf Resorts and does not extend to all
    properties damaged therein?

    YES
    RULING:
     The insurance policy covers only the two swimming pools.
     It is basic that all the provisions of the insurance policy should be
    examined and interpreted in consonance with each other. All its parts
    are reflective of the true intent of the parties. The policy cannot be
    construed piecemeal. All the provisions and riders, taken and
    interpreted together, indubitably show the intention of the parties to
    extend earthquake shock coverage to the two swimming pools only.
     A careful examination of the premium recapitulation will show that it is
    the clear intent of the parties to extend earthquake shock coverage only
    to the two swimming pools.
     Section 2(1) of the Insurance Code defines a contract of insurance as an
    agreement whereby one undertakes for a consideration to indemnify another
    against loss, damage or liability arising from an unknown or contingent event.
     Thus, an insurance contract exists where the following elements concur:
    1. The insured has an insurable interest;
    2. The insured is subject to a risk of loss by the happening of the designated peril;
    3. The insurer assumes the risk;
    4. Such assumption of risk is part of a general scheme to distribute actual losses among a large group
    of persons bearing a similar risk; and
    5. In consideration of the insurer's promise, the insured pays a premium.
     An insurance premium is the consideration paid an insurer for undertaking to indemnify the
    insured against a specified peril. In fire, casualty, and marine insurance, the premium payable
    becomes a debt as soon as the risk attaches.
     In the subject policy, no premium payments were made with regard to earthquake shock
    coverage, except on the two swimming pools. There is no mention of any premium payable for
    the other resort properties with regard to earthquake shock. This is consistent with the history of
    petitioners previous insurance policies from AHAC-AIU.
     In sum, there is no ambiguity in the terms of the contract and its riders. Petitioner cannot
    rely on the general rule that insurance contracts are contracts of adhesion which should be
    liberally construed in favor of the insured and strictly against the insurer company which
    usually prepares it.
     A contract of adhesion is one wherein a party, usually a corporation, prepares
    the stipulations in the contract, while the other party merely affixes his
    signature or his "adhesion" thereto. Through the years, the courts have held
    that in these type of contracts, the parties do not bargain on equal footing, the
    weaker party's participation being reduced to the alternative to take it or leave
    it. Consequently, any ambiguity therein is resolved against the insurer, or
    construed liberally in favor of the insured.
     The case law will show that this Court will only rule out blind adherence to
    terms where facts and circumstances will show that they are basically one-
    sided.
     We cannot apply the general rule on contracts of adhesion to the case at bar.
     Thus, petitioner cannot claim that it did not know the provisions of the
    policy. From the inception of the policy, petitioner had required the
    respondent to copy verbatim the provisions and terms of its latest
    insurance policy from AHAC-AIU.

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