PAYMENT OF PREMIUMS

ALGARME | MAGNAYE | VICTA

 PAYMENT OF PREMIUM MATRIX
INSTANCE RULE
When no premium is paid No policy issued by an insurance
company is valid and binding until
actual payment of premium. Any
agreement to the contrary is void.
(Sec. 77)
The Balance of the Premium The Insurance Policy IS NOT valid
which was only Partially Paid, was and enforceable upon mere partial
paid only after the loss occurred payment of premiums (Tibay v. CA,
257 SCRA 126)
EXCEPTIONS
Condition, conduct or Default of the
insurer
1. Insurer becomes insolvent
2. Failure was due to wrongful
conduct of insurer
3. Insurer waived his right to demand
payment
The Insurance Company sued for the
payment of the balance without any
other precondition to its
enforceability (Phoenix Surety &
Insurance Co v. Woodworks, 20 SCRA
The parties mutually agreed that the
premium could be paid in installment (
Makati Tuscany v CA)
When there is an agreement to grant
a credit extension for the payment of
premium (Art 1306, NCC)
 INSTANCE
PAYMENT
Stipulation in theOF PREMIUM
contract that
the policy is not binding until the policy or contract of the receipt of
premium is actually paid
Policy provides a credit term is
given for the payment of
premiums
RULE
MATRIX
SEC 79. an acknowledgement in a
premium is conclusive evidence of its
payment, so far as to make the policy
binding, notwithstanding any
stipulation therein that it shall not be
binding until the premium is actually
paid
If the credit extension exceeds 90
days from the date of the issuance of
the policy, it should be deemed only
for 90 days
EXCEPTIONS
Hence a policy is binding when there
is an acknowledgement of receipt of
premium
If the credit exceeds the 90 day credit
term and the insurer receives the
premium but before the loss renders
the insurance vakid and binding. The
Insurer is Estopped