A.

Definition and form

SEC. 49. The written instrument in which a contract of insurance is set forth,
is called a policy of insurance.
SEC. 50. The policy shall be in printed form which may contain blank
spaces; and any word, phrase, clause, mark, sign, symbol, signature,
number, or word necessary to complete the contract of insurance shall be
written on the blank spaces provided therein.
Any rider, clause, warranty or endorsement purporting to be part of the
contract of insurance and which is pasted or attached to said policy is not
binding on the insured, unless the descriptive title or name of the rider,
clause, warranty or endorsement is also mentioned and written on the blank
spaces provided in the policy.
Unless applied for by the insured or owner, any rider, clause, warranty or
endorsement issued after the original policy shall be countersigned by the
insured or owner, which countersignature shall be taken as his agreement to
the contents of such rider, clause, warranty or endorsement.
Notwithstanding the foregoing, the policy may be in electronic form subject
to the pertinent provisions of Republic Act No. 8792, otherwise known as the
Electronic Commerce Act and to such rules and regulations as may be
prescribed by the Commissioner.
(see RA 8792)
B. Fine Print Rule
C. Contents of the Policy
SEC. 51. A policy of insurance must specify:
(a) The parties between whom the contract is made;
(b) The amount to be insured except in the cases of open or running
policies;
(c) The premium, or if the insurance is of a character where the exact
premium is only determinable upon the termination of the contract, a

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V. The Policy of Insurance

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statement of the basis and rates upon which the final premium is to be
determined;
(d) The property or life insured;
(e) The interest of the insured in property insured, if he is not the absolute
owner thereof;
(f) The risks insured against; and
(g) The period during which the insurance is to continue.
D. Papers Attached to the Policy and their Binding Effect (Rider, warranties,
clause, endorsement)
E. Kinds of Policy
1.

Open

SEC. 60. An open policy is one in which the value of the thing insured is not
agreed upon, and the amount of the insurance merely represents the
insurers maximum liability. The value of such thing insured shall be
ascertained at the time of the loss.
2.

Valued

SEC. 61. A valued policy is one which expresses on its face an agreement
that the thing insured shall be valued at a specific sum.
3.

Running

SEC. 62. A running policy is one which contemplates successive

insurances, and which provides that the object of the policy may be from
time to time defined, especially as to the subjects of insurance, by additional
statements or indorsements.
F. Cover Notes

Cover notes may be extended or renewed beyond such sixty (60) days with
the written approval of the Commissioner if he determines that such
extension is not contrary to and is not for the purpose of violating any
provisions of this Code. The Commissioner may promulgate rules and
regulations governing such extensions for the purpose of preventing such
violations and may by such rules and regulations dispense with the
requirement of written approval by him in the case of extension in
compliance with such rules and regulations.

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SEC. 52. Cover notes may be issued to bind insurance temporarily pending
the issuance of the policy. Within sixty (60) days after issue of a cover note,
a policy shall be issued in lieu thereof, including within its terms the identical
insurance bound under the cover note and the premium therefor.

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(b) That, upon written request of the named insured, the insurer will furnish
the facts on which the cancellation is based.
SEC. 66. In case of insurance other than life, unless the insurer at least
forty-five (45) days in advance of the end of the policy period mails or
delivers to the named insured at the address shown in the policy notice of its
intention not to renew the policy or to condition its renewal upon reduction of
limits or elimination of coverages, the named insured shall be entitled to
renew the policy upon payment of the premium due on the effective date of
the renewal. Any policy written for a term of less than one (1) year shall be
considered as if written for a term of one (1) year. Any policy written for a
term longer than one (1) year or any policy with no fixed expiration date shall
be considered as if written for successive policy periods or terms of one (1)
year.

G. Cancellation of Policy

SEC. 65. All notices of cancellation mentioned in the preceding section shall
be in writing, mailed or delivered to the named insured at the address shown
in the policy, or to his broker provided the broker is authorized in writing by
the policy owner to receive the notice of cancellation on his behalf, and shall
state:
(a) Which of the grounds set forth in Section 64 is relied upon; and

H. Time to Commence Action on the Policy; Effect of Stipulation

SEC. 63. A condition, stipulation, or agreement in any policy of insurance,
limiting the time for commencing an action thereunder to a period of less
than one (1) year from the time when the cause of action accrues, is void.