TITLE VI THE POLICY Section 49.

. The written instrument in which a contract of insurance is set forth, is called a policy of insurance. Section 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. Group insurance and group annuity policies, however, may be typewritten and need not be in printed form. What is a policy of insurance? Sec. 49 defines a policy of insurance as a written instrument in which the contract of insurance is set forth. Who signs the policy of insurance: Generally, only the insurer or his duly authorized agent signs the policy. It need not be singed by the insured EXCEPT where the express warranties are contained in a separate instrument forming part of the policy, in which case, Sec. 70 requires that the instrument be so signed. Why are the terms of the policy important? They are important because they measure the liability of the insurer on one hand, and the other hand, strict compliance with the terms are required for the recovery on the part of the insured. Is the policy and the Contract one and the same thing? NOPE. A contract is a meeting of the minds of the insured and the insurer. (Remember CLV?) The policy ONLY the formal written instrument evidencing the contract. What is usually the best evidence that a contract has been entered into between the insurer and the insured? Delivery of the policy by the insurer to the insured. What are the effects of the delivery of the policy? If the delivery is conditional, non-fulfillment of the condition bars the contract from taking effect. If the deliver is unconditional, the insurance becomes effective at the time of delivery.

What is a rider? It is a printed or typed stipulation contained on a slip of paper attached to the policy and forming an integral part of the policy. Riders are usually attached to the policy because they constitute additional stipulations between the parties. What happens if there is an inconsistency between the policy and the rider? RIDER prevails, as being a more deliberate expression of the agreement of the contracting parties. What are the requirements in order that a rider be binding upon the insured? 1) Descriptive title or name of the rider which is pasted or attached to a policy MUST be mentioned and written on the blank spaces provided for in the policy; and 2) Unless applied for by the insured or owner, said insured or owner MUST countersign the rider. Do the preceding requirements apply only to riders? NO. they apply also to warranties, clauses and endorsements. What are warranties? Warranties are inserted or attached to a policy to eliminate specific potential increases of hazard during the policy term owing to actions of the insured, or conditions of property. What are clauses? Clauses are agreements between the insurer and the insured on certain matters relating to the laibiity of the insurer in case of loss. What are examples of clauses: 1) Clause where the insurer is liable for only of the loss or damage to the insured 2) Loss Payable clause where the loss if any is payable to the party or parties named, as their interests may appear. 3) Change of Ownership clause where the insurance will insure to the benefit of whomsoever, during the continuance of the risk, may become the owner of the interest insured. What is an endorsement? An endorsement is any provision added to an insurance contract altering its scope or application. Examples would be those additions to the contract changing the amount, the rate or the term of the same. What does Sec. 226 say? Section 226. No policy, certificate or contract of insurance shall be issued or delivered within the Philippines unless in the form previously approved by the Commissioner, and no application form shall be used with, and no rider, clause, warranty or endorsement shall be attached to, printed or stamped upon such policy, certificate or contract unless the form of such application, rider, clause, warranty or endorsement has been approved by the Commissioner.

Section 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 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. What must a policy contain and what are the reason behind such requirements? A policy must contain: 1. Names of the parties 2. Amount of insurance to easily and exactly determine the amount of indemnity to be paid in case of loss or damage. This requirement however can be dispensed with in cases of open or running policies. 3. Rate of premium Because the premium represents the consideration of the contract; these rates are developed on the basis of the nature and character of the risk assumed. Remember Atty. Quimsons famous words? As the risk increases, the rate of premium also increases. 4. Property or life or thing insured Constitutes the Subject Matter 5. Interests of the insured in the property In order to determine actual damage. Remember, an owner gets the full value of the loss while a mortgagee gets only the value of his credit. 6. Risks insured against In order to know when the insurer is called to indemnify the insured, because if this is NOT stated, and you hold the insurer liable for any loss due to any cause whatsoever, it will result to a big loss on the part of the insurer. 7. Duration of the insurance This period signifies the life of the policy. If the duration of insurance has already ended, it can no longer be revived. What are the kinds of insurable risks? 1) Personal risks life or health risks 2) Property risks loss or damage to property 3) Liability risks involve liability of the insured for an injury caused to the person or property of another What are the requirements in order that a risk be insurable? 1) The loss to be insured against must be important enough to warrant the existence of an insurance contract

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Risk must permit a reasonable statistical estimate of the chance of loss in order to determine the amount of premium to be paid The loss should be definite as to cause, time, place and amount The loss is not catastrophic Risk is accidental in nature

NOTE: Read sections 227, 228, and 230 for additional matters to be included in individual, group and industrial life policies.

Section 52. Cover notes may be issued to bind insurance temporarily pending the issuance of the policy. Within sixty days after the issue of the 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. Cover notes may be extended or renewed beyond such sixty 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. What are two types of preliminary contracts of insurance? The preliminary contract of present insurance and the preliminary executory contract of insurance. What is a preliminary contract of present insurance? By a preliminary contract of insurance, the insurer insures the subject matter usually by what is known as a binding slip or binder or cover note which is the contract to be effective until the formal policy is issued or the risk is rejected. What is a cover note? The cover not is merely a written memorandum of the most important terms of the preliminary contract of insurane, intended to give temporary protection pending the investigation of the risk by the insurer, or until the issuance of a formal policy, provided that it is later determined that the applicant was insurable at the time it was given. By its nature, it is subject to all conditions in the policy expected even though that policy may never issue. In life insurance, where an agreement is made between an applicant and the insurers agent, no liability shall attach until the insurer approves the risk. Thus, in life insurance, a binding slip or binding receipt DOES NOT insure itself. Can you explain a preliminary executory contract of insurance? By a preliminary executory contract of insurance, the insurer makes a contract to insure the subject matter at

some subsequent time which may be definite or indefinite. Under such an executory contract, the right acquired by the insured is merely to demand the delivery of the policy in accordance with the terms agreed upon and the obligation assumed by the insurer is to deliver the said policy. What are the rules governing cover notes? 1) Insurance companies doing business in the Philippines may issue cover notes to bind insurance temporarily pending the issuance of the policy 2) 3) A cover not shall e deemed to be a contract of insurance within the meaning of Sec. 1(1) of IC. NO cover note shall be issued or renewed unless in the form previously approved by the Insurance Commission. A cover not shall be valid and binding for a period NOT exceeding 60 days from the date of its issuance, whether or not the premium therefore has been paid or not, BUT such cover note may be canceled by either party upon at least 7 days notice to the other party. If a cover not is not so canceled, a policy of insurance shall, within 60 days after the issuance of the cover not be issued in lieu thereof. Such policy shall include within its terms the identical insurance bound under the cover note and the premiums therefore. A cover note may be extended or renewed beyond the aforementioned period of 60 days with the written approval of the Insurance Commissioner, provided that such written approval may be dispensed with upon the certification of the Pres, VP or General Mgr of the Insurance company concerned, that the risks involved, the values of such risks, and the premiums therefore have not as yet been determined or established and that such extension or renewal is NOT contrary to and is not for the purpose of violating any provision of the IC. The insurance companies may impose on cover notes a deposit premium equivalent to at least 25% of the estimated premium of the intended insurance coverage but in no case less than P500.

character of the risk and to take the place of the policy until the latter can be issued. The issuance of a binder evidences, a complete, temporary or preliminary contract of insurance effective from that time until the issuance of the formal policy or until rejection of the risk. Under a life policy, it would establish liability upon the insurer if death occurred prior to the issuance of the policy. A binder receipt would be misnamed if it does NOT bind the insurer. If the insurer issues a binder receipt with terms which will negate, or neutralize the binding result of the receipt, then the insurer would have actually practiced fraud on the applicant for insurance.

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Section 53. The insurance proceeds shall be applied exclusively to the proper interest of the person in whose name or for whose benefit it is made unless otherwise specified in the policy. Recall Section 12. Section 12 provides: The interest of a beneficiary in a life insurance policy shall be forfeited when the beneficiary is the principal, accomplice or accessory in willfully bringing about the death of the insured; in which event, the nearest relative of the insured shall receive the proceeds of said insurance if not otherwise qualified. So? It is an exception to Section 53. What does Art. 2127 of the CC say? Art. 2127. The mortgage extends to the natural accession, to the improvements, growing fruits and the rents or income not yet received when the obligation becomes due, and the amount of the indemnity granted or owing to the proprietor from the insurers of the property mortgaged, or in virtue of expropriation for public use, with declarations, amplifications and limitations established by law, whether the estate remains in the possession of the mortgagor or it passes into the hands of a third person. Problems. A had taken out a policy on his car with the stipulation: loss if any payable to Z, the mortgagee of the car. The car got lost and X, the owner of the auto repair shop where the car was fixed filed a claim with the insurance company. Is X entitled to collect the cost of repair? NO. As far as the insurance company is concerned, X is not privy to the insurance contract. Even if there was a provision in the contract authorizing either A or Z to contract for repairs, this does not mean that X became entitled to claim the proceeds. In this case, the proceeds must be paid to Z, and in case Z was the one who contracted for the repairs, Z must pay X.

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Aside from the ruling, for what other reason did Atty. Quimson ask us to read the case of Gloria v. Philamlife? The case defined a binding receipt. What is a binding receipt according to Glora v. Philamlife? A binding receipt or slip is ordinarily a document, slip or memorandum given to the insured, which binds the insurance company to pay insurance should a loss occur pending action upon the application and actual issuance of a policy. The purpose of a binder is to provide temporary insurance pending an inquiry by the insurer as to the

Section 54. When an insurance contract is executed with an agent or trustee as the insured, the fact that his principal or beneficiary is the real party in interest may be indicated by describing

the insured as agent or trustee, or by other general words in the policy. Who may take insurance? An insurance may be taken by a person, personally or through his agent or trustee. If the insurance is taken by an agent or trustee, what must the agent or trustee do? Since the insurance is to be applied exclusively to the interest of the person in whose name and for whose benefit it is made, the agent or trustee when making an insurance contract for or on behalf of his principal should, indicate that he is merely acting in a representative capacity by signing as such agent or trustee, or by other general terms in the policy.

What is the reason behind Sec. 58? Sec. 58 follows from the well established principle that a policy is a personal contract with the insured and does NOT run with the insured property unless so expressly stipulated, and in the absence of an assignment of the policy with the insurers consent, the purchaser of the interest of the property requires no privity with the insurer. In reading sec. 58, take not of Sec. 19 and 20. Section 19. An interest in property insured must exist when the insurance takes effect, and when the loss occurs, but need not exist in the meantime; and interest in the life or health of a person insured must exist when the insurance takes effect, but need not exist thereafter or when the loss occurs. Section 20. Except in the cases specified in the next four sections, and in the cases of life, accident and health insurance, a change of interest in any part of a thing insured, unaccompanied by a corresponding change of interest in the insurance, suspends the insurance to an equivalent extent, until the interests in the thing and the interest in the insurance are vested in the same person. Problem. A borrowed 5,000 from B, and to secure payment of his obligation, he mortgaged his house to B. B then insured the house for 5T. Subsequently, B assigned his mortgage credit to X, but did not make the corresponding transfer of his right over the insurance policy. IF the house burns down, is Paul entitled to collect the insurance money as assignee-mortgagee? NO, since B did not assign his right over the insurance policy to X. A purchaser of insured property who does Not take the precaution to obtain a transfer of the policy on the insurance, cannot in case of loss, recover upon the contract, as the transfer of the property has the effect of suspending the insurance until the purchaser becomes the owner of the policy as well as the property insured. -----------TITLE 6 THE POLICY A. POLICY OF INSURANCE The written instrument in which a contract of insurance is set forth (Sec. 49, Insurance Code). Note: A policy of insurance is not necessary for the perfection of the contract. An insurance contract may be verbal or in writing, or partly in writing and partly verbal. If the parties opt to have a written instrument, the law provides that no policy of insurance shall be issued or delivered unless in the form previously approved by the Insurance Commission (Sec. 226, Insurance Code). Effects of Failure to Obtain Approval a. It does not affect the validity of the terms of the contract; the policy may still be enforced

Section 55. To render an insurance effected by one partner or part-owner, applicable to the interest of his co-partners or other part-owners, it is necessary that the terms of the policy should be such as are applicable to the joint or common interest.

What happens when the insurance is effected by a partner or a part-owner? A partner or part-owner who insures partnership property in his own name limits the contract to his individual share UNLESS the terms of the policy clearly show that the insurance was meant to cover also the shares of the other partners.

Section 56. When the description of the insured in a policy is so general that it may comprehend any person or any class of persons, only he who can show that it was intended to include him can claim the benefit of the policy. What happens when the description of the insured is general? In order that the insurance may be applied to the interest of the person claiming the benefit of the policy, he must show that he is the person named or described or that he belongs to the class of persons comprehended in the policy. Example? If the policy is payable to the children, you must show that you are a child of the deceased. Not a grandchild, nor a great-grand-child.

Section 57. A policy may be so framed that it will inure to the benefit of whomsoever, during the continuance of the risk, may become the owner of the interest insured. Section 58. The mere transfer of a thing insured does not transfer the policy, but suspends it until the same person becomes the owner of both the policy and the thing insured.

b. The insurer cannot set up its failure to comply with the requirements as a defense. c. The insurer will be liable to prosecution. B. LANGUAGE OF THE POLICY; DUTY TO PROVE, BURDEN In case the language of the policy is one which the insured cannot read or understand, the obligation to show that the terms of the contract had been fully explained to the insured devolves on the party seeking to enforce the contract. Hence, if insured is seeking to enforce the contract, the insurer has no obligation to prove that the terms of the contract were explained to the insured. Illustration: Facts: Robert Lim Tan Sy, a 65-year old illiterate who spoke only Chinese, applied for life insurance. The application which became part of the insurance was in English and since his answers indicated that he was healthy, the insurer issued the policy. Months later, he died of HIV because he was promiscuous in his youth. It turned out that Robert Lim Tan Sy concealed material facts about her medical history so the insurer denied liability. Maritess Lim Tan Sy, beneficiary, argued that the insured could not be found guilty of concealment because the insurer failed to prove that the terms of the contract were explained to Robert. Issue: Was the insurer bound to explain the terms of the contract to an illiterate insured? Held: No. The insurer was not seeking performance but in fact seeking its avoidance. Since the insured was guilty of concealment, the insurer is not liable. C. CONTENTS OF POLICY (R2AP2ID): 1. Parties; 2. Amount of insurance, except in open or running policies; 3. Rate of premium; 4. Property or the life insured; 5. Interest of the insured in the property if he is NOT the absolute owner; BUT if he is the absolute owner, information of the nature or amount of his interest need not be communicated unless in answer to an inquiry (Sec. 34, Insurance Code). 6. Risk insured against; 7. Duration of the insurance. Effect of Error in Name of Insured General Rule: It does not invalidate the policy. Exception: If there is fraud or the insurer was misled as to the extent of the liability assumed. D. RIDER

An attachment to an insurance policy that modifies the conditions of the policy expanding or restricting its benefits or excluding certain conditions from the coverage. Counter-signature of the insured on a rider, endorsement, clause, or warranty a. If the rider, endorsement, clause or warranty was issued SIMULTANEOUSLY with the policy: The counter-signature of the insured is NOT necessary. However, the descriptive title or name of the rider must be written on the blank spaces provided in the policy. b. If the rider, endorsement, clause, or warranty was issued AFTER the issuance of the policy AND the insured applied for the rider, endorsement, clause, or warranty: His counter-signature is NOT necessary c. If the rider, endorsement, clause, or warranty was issued AFTER the issuance of the policy AND the same is NOT applied for by the insured, riders and the like: It shall be countersigned by the insured or owner. Effect: When the requirements for a rider are complied with, it is considered as part of the policy. Rule in Case of Conflict between Rider and Printed Stipulations of a Policy When there is an inconsistency between a rider and the printed stipulations in the policy, the rider prevails as being a more deliberate expression of the agreement of the contracting parties. This principle applies to the interpretation of clauses, warranties, or indorsements which are attached to policies to vary their terms. (The Insurance Code of the Philippines Annotated, Hector de Leon, 2006ed). E. COVER NOTES AND BINDERS Binding Receipt A mere acknowledgment on behalf of the company that its branch office had received from the applicant the insurance premium and had accepted the application subject to processing by the head office. Cover Note (Ad Interim) A concise and temporary written contract issued by the insurer through its duly authorized agent embodying the principal terms of an expected policy of insurance. Purpose: Binders/cover notes are preliminary contracts of insurance, intended to give temporary insurance protection coverage to the applicant pending the acceptance or rejection of his application. Preliminary Contract of Insurance vs. Memorandum of Future Insurance Only the former gives adequate protection to the insured. The latter is only a mere agreement to insure at some future time, as on acceptance of the application or on the issuance or delivery of the policy. Rules on Cover Notes (Sec. 52):

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The cover note is valid for 60 days, after which the policy must be issued. The period may be extended or renewed beyond 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 the Code. The approval of the Insurance Commissioner may be dispensed with upon the certification of the president, vice-president, or general manager of the insurance company concerned that the risk involved, the values of such risks and/ or the premiums therefor has not yet been determined or established, or such extension or renewal is not contrary to and is not for the purpose of violating any provisions of the Insurance Code, or of any rulings, instructions, or circulars of the Insurance Commissioner (Ins. Memo Cir. No. 3-75, dated September 29, 1975, effective Oct. 21, 1976).

name or for whose benefit it is made. A third person may not sue the insurer directly. Exception: If the insurance contract was intended to benefit third persons (Art. 1311, Civil Code), the latter may directly claim from the insurer. Thus, 1. If the insurance contract contain some stipulation in favor of a third person (stipulation pour autrui), the latter although not a party to the contract may enforce the stipulation in his favour before it is revoked by the contracting parties (Coquia v. Fieldmens Ins. Co., et al, GR No. L-23276, November 29, 1968). 2. A third person has no right in law or equity to the proceeds of an insurance unless there is a contract or trust, express or implied, between the insured and third person (Bonifacio Bros., Inc. v. Mora, GR No. L-20853, May 29, 1967). 3. Where the contract insurance provides for indemnity against liability to third persons, then third persons, to whom the insured is liable, can sue the insurer (Guingon v. del Monte, et al., GR No. L-21806, 20 SCRA 1043, August 17, 1967). Insurance Procured by an Agent/Partner (See Secs. 54-55) Requisites for Agency: 1. agent must be authorized; 2. must act within the scope of his authority; 3. must disclose his principal; 4. indicate by appropriate words that he is acting in a representative capacity. Rules as to Agent 1. If the property is in the possession of an agent, the principal may insure the same as the owner while the agent responsible for such property may likewise insure the same. 2. If an insurance is procured by the agent and it is intended to cover the interest of the principal, that fact must be stated in the policy. 3. If an agent secures the policy in his name alone, it is deemed to cover only his own interest and the principal has no right of action against the insurer. Rules as to Partners 1. A partner has an insurable interest in the property of the partnership which will support a separate policy for his benefit. 2. When a partner takes a policy on the partnership property in his own name, it is deemed to include his separate interest alone, unless the terms of the policy should be such as are applicable to the joint or common interest. Test to determine whether a Third Person may Directly Sue the Insurer of the Wrongdoer Where the contract provides for INDEMNITY AGAINST LIABILITY to third persons, then the latter to whom the insured is liable, can directly sue the insurer. On the other hand, where the insurance is for INDEMNITY AGAINST ACTUAL LOSS OR PAYMENT, then third persons cannot proceed against the insurer, the contract being

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No separate premiums are intended or required to be paid on a cover note because cover notes do not contain particulars of the property insured that would serve as basis for the computation of premiums. Thus, no premium could be fixed and paid on the cover note. (Pacific Timber Export Corporation vs. Court of Appeals, GR No. L-38613, 112 SCRA 199, February 25, 1982). Cover notes should not be treated as separate policies but should be integrated to the regular policies subsequently issued so that the premiums on the regular policies include the consideration for the cover notes (Pacific Timber Export Corporation vs. Court of Appeals, GR No. L-38613, 112 SCRA 199, February 25, 1982).

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Rules on Binding Receipt Issued by Agent (pending approval or issuance of the policy) a. If the act of acceptance of the risk by the agent and the giving by him of a receipt is within the scope of the agents authority and nothing remains but to issue the policy, the receipt will bind the company. b. Where an agreement is made between the applicant and the agent whether by signing an application containing such condition, or otherwise, that no liability shall attach until the principal approves the risk and a receipt is given by the agent, such acceptance is merely conditional and is subordinated to the act of the company in approving or rejecting. 3. When the acceptance by the agent is within the scope of his authority, a receipt containing the insurance for a specified time which is not absolute but conditional upon acceptance or rejection by the principal, covers the specified person unless the risk is declined within that period. F. INSURANCE PROCEEDS, TO WHO APPLIED General Rule: The insurance proceeds shall be applied exclusively to the proper interest of the person in whose

solely to reimburse the insured for liability actually discharged by him through payment to third persons, said third persons recourse being, thus limited to the insured alone (Guingon v. Del Monte, Ibid). G. WHEN DESCRIPTION OF INSURED IS GENERAL (Sec. 56) When there are several persons having insurable interest on the same object of the insurance and the description of the persons insured is so general that it comprehends any person or any class of persons, the person claiming the proceeds of the policy must prove that such description was intended to include him. Example: A fire insurance policy describes the persons insured as the co-owners of the building insured. In case Honey wants to recover her share of the proceeds of the policy after the loss of the building, A must prove that he is one of the co-owners thereof. H. SECTION 57, AN EXCEPTION TO SECTIONS 20 AND 58 General Rules: Transfer of interest in the thing insured unaccompanied by a corresponding change of interest in the policy suspends the insurance. Exception: When the policy is so framed that it will inure to the benefit of whomsoever, during the continuance of the risk, may become the owner of the interest insured, the transfer of the property will not suspend the insurance. Instead, the insurance is deemed transferred together with the property. I. KINDS OF INSURANCE POLICIES 1. Open Policy one in which the value of the thing insured is not agreed upon, but is left to be ascertained in case of loss (Sec. 60, Insurance Code). Valued Policy one which expresses on its face agreement that the thing insured shall be valued at a specified sum (Sec. 61, Insurance Code). Running Policy 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 endorsements (Sec. 62, Insurance Code).

Computation of one-year period The stipulated one-year period minimum for bringing an action against the insurer should be computed from the time the cause of action accrues. The cause of action accrues from the time the insurer rejected the claim of the insured NOT from the time of loss, since, before such rejection, there is no necessity for brining the suit against the insurer. When no period agreed upon When no period for bringing the action had been agreed upon, the insured may bring the action within the prescriptive period provided for in the Civil Code ten years in case the contract is written, and six years in case of oral contracts from the time the cause of action accrues. K. CANCELLATION OF NON-LIFE POLICY (Sections 64 and 65) Requisites (WANG): 1. prior notice of cancellation to the insured; 2. notice must be based on the occurrence after the effective date of the policy of one or more of the grounds mentioned; 3. notice must be in writing, mailed or delivered to the insured at the address shown in the policy; 4. notice must state the grounds relied upon provided in Section 64 of the Insurance Code and upon request of the insured to furnish facts on which cancellation is made. Grounds (VP- FrANC): 1. non-payment of premiums; 2. conviction of a crime out of acts increasing the hazard insured against; 3. fraud or material misrepresentation; 4. wilLful or reckless acts or omissions increasing the risk insured against; 5. physical changes in the property insured making it uninsurable; 6. determination by the Insurance Commissioner that the policy would violate the Insurance Code L. OPTION TO RENEW (Section 66) It gives the insured the option to renew a property insurance by the payment of the premium due on the effective date of renewal unless at least forty-five days prior to the end of the policy, the insurer gives notice of its intention not to renew.

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J. LIMITATION OF ACTION BY AGREEMENT (Section 63) 1. The parties to a contract of insurance may validly agree that an action on the policy should be brought within a limited period of time, provided such period is not less than one year from the time the cause of action accrues. 2. If the period agreed upon be less than a year, such agreement is void. 3. Section 380 is an exception to this rule. It is provided that an action for the recovery of damage under the compulsory motor vehicle liability insurance must be brought within one year from the date of the accident. In such case, therefore, the period of prescription commences from the date of the accident and not from the denial of the claim by the insurer.