Practice question
Rosa insures her mortgaged warehouse in her own name, with loss payable to Bank. The policy does not provide otherwise, and no new independent contract with Bank exists. Before loss, Rosa commits an act stipulated to avoid this insurance. Bank argues that naming it as loss payee automatically makes Rosa’s conduct irrelevant. Apply Section8.
- Rosa remains a party, and her avoiding act has the same effect despite Bank being loss payee
- Naming Bank always eliminates every act of Rosa
- The policy necessarily insures only Bank’s independent interest
- Mortgage possession alone cures every policy breach
- Section8 applies only to life insurance
Legal references
- Insurance Code as amended RA10607: https://lawphil.net/statutes/repacts/ra2013/ra_10607_2013.html Sections2(b),3 and5–9.
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