20. Gulf Resorts, Inc. v.

Phil Charter Insurance, Corporation

458 SCRA 550
Facts Plaintif 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 (AHACA!U"# Attached in the said insurance is an
indorsement that the same co$ers loss or damage (including loss or damage
%y &re" to any of the property insured %y this Policy occasioned %y or through
or in conse'uence of (arth'ua)e# !n the &rst four insurance policies issued
%y AHAC, the ris) of loss from earth'ua)e shoc) was e*tended only to
plaintif+s two swimming pools# !n ,--., an earth'ua)e struc) Central Luzon
and /orthern Luzon so the properties and two swimming pools in its Agoo
Playa Resort were damaged# Petitioner &led its formal demand for settlement
of the damage to all its properties claiming that, pursuant to its earth'ua)e
shoc) endorsement rider, !nsurance Policy /o# 0,-11 co$ers all damages to
the properties within its resort caused %y earth'ua)e# Respondent denied
petitioner+s claim on the ground that its insurance policy only aforded
earth'ua)e shoc) co$erage to the two swimming pools of the resort# !t
contended that the rider limits its lia%ility for loss to the two swimming pools
of petitioner#
Issue 2hether or not the lia%ility of the insurance company e*tends to the
other properties of the petitioner3
!el" /o# Petitioner cannot focus on the earth'ua)e shoc) endorsement to
the e*clusion of the other pro$isions# All the pro$isions and riders, ta)en and
interpreted together, indu%ita%ly show the intention of the parties to e*tend
earth'ua)e shoc) co$erage to the two swimming pools only#
A careful e*amination of the premium recapitulation will show that it is
the clear intent of the parties to e*tend earth'ua)e shoc) co$erage only to
the two swimming pools# 4ection 5(," of the !nsurance Code de&nes a
contract of insurance as an agreement where%y one underta)es for a
consideration to indemnify another against loss, damage or lia%ility arising
from an un)nown or contingent e$ent# 6hus, an insurance contract e*ists
where the following elements concur7 ,#" 6he insured has an insura%le
interest8 5#" 6he insured is su%9ect to a ris) of loss %y the happening of the
designated peril8 0# " 6he insurer assumes the ris)8 1#" 4uch assumption of
ris) is part of a general scheme to distri%ute actual losses among a large
group of persons %earing a similar ris)8 and :#" In consi"eration of the
insurer#s pro$ise, the insure" pa%s a pre$iu$#
An insurance premium is the consideration paid an insurer for
underta)ing to indemnify the insured against a speci&ed peril# !n &re,
casualty, and marine insurance, the premium paya%le %ecomes a de%t as
soon as the ris) attaches# !n the su%9ect policy, no premium payments were
made with regard to earth'ua)e shoc) co$erage, e*cept on the two
swimming pools# 6here is no mention of any premium paya%le for the other
resort properties with regard to earth'ua)e shoc)# 6his is consistent with the
history of petitioner+s pre$ious insurance policies from AHACA!U#