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Insurance Case Digest: Gulf Resorts Inc. v. Philippine Charter Insurance Corp. (2005)

G.R. No. 156167  May 16, 2005
Lessons Applicable: Stipulations Cannot Be Segregated (Insurance)

  • Gulf Resorts, Inc at Agoo, La Union was insured with American Home Assurance Company which includes loss or damage to shock to any of the property insured by this Policy occasioned by or through or in consequence of earthquake 
  • July 16, 1990: an earthquake struck Central Luzon and Northern Luzon so the properties and 2 swimming pools in its Agoo Playa Resort were damaged
  • August 23, 1990: Gulf's claim was denied on the ground that its insurance policy only afforded earthquake shock coverage to the two swimming pools of the resort
    • Petitioner contends that pursuant to this rider, no qualifications were placed on the scope of the earthquake shock coverage.  Thus, the policy extended earthquake shock coverage to all of the insured properties.
  • RTC: Favored American Home - endorsement rider means that only the two swimming pools were insured against earthquake shock 
  • CA: affirmed RTC
ISSUE: W/N Gulf can claim for its properties aside from the 2 swimming pools

HELD: YES. Affirmed.
  • It is basic that all the provisions of the insurance policy should be examined and interpreted in consonance with each other.
    • All its parts are reflective of the true intent of the parties.
Insurance Code
Section 2(1)
contract of insurance as an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event
  • An insurance premium is the consideration paid an insurer for undertaking to indemnify the insured against a specified peril.
    • In the subject policy, no premium payments were made with regard to earthquake shock coverage, except on the two swimming pools.