Practice question
A single property policy separately insures MachineX and MachineY. The insured sells only X without a corresponding transfer of insurance. Later Y is damaged by a covered peril while the insured still owns it. No other bar applies. The insurer invokes the sale of X to avoid insurance on Y. Which is correct under Section22?
- A change of interest in X does not avoid insurance on separately insured Y
- Sale of any item necessarily avoids every separately insured item
- The insured must own X forever to recover on Y
- The policy is automatically transformed into life insurance
- Section22 concerns only changes after the loss
Legal references
- Insurance Code as amended RA10607: https://lawphil.net/statutes/repacts/ra2013/ra_10607_2013.html Sections10,14,16 and20–25.
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