Practice question
An insured pays the premium for a non-life risk and the insurer validly bears that particular risk for a period. No loss happens during that time. The insured demands the entire earned premium back solely because the risk did not produce a claim. No separate refund basis is asserted. Which is correct?
- No claim always means no risk was insured
- Section 81 denies return so far as that particular risk is concerned when the peril existed and the insurer was liable for a period
- The insurer must always refund every premium at year-end
- Only an actual loss earns any premium
- The absence of loss automatically rescinds the contract
Legal references
- Insurance Code as amended by RA 10607, Section 81: https://lawphil.net/statutes/repacts/ra2013/ra_10607_2013.html
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