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Essentials of an Insurance Contract

An insurance contract is an agreement where the insurer promises to pay the insured a sum of money upon loss or damage in exchange for a premium. The contract must meet specific requisites including mutual consent, an object of interest, a cause for the contract, uncertainty of risk, insurable interest, premium payment, and a promise to indemnify. It is governed by the Insurance Code of the Philippines and the Civil Code.

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2 views1 page

Essentials of an Insurance Contract

An insurance contract is an agreement where the insurer promises to pay the insured a sum of money upon loss or damage in exchange for a premium. The contract must meet specific requisites including mutual consent, an object of interest, a cause for the contract, uncertainty of risk, insurable interest, premium payment, and a promise to indemnify. It is governed by the Insurance Code of the Philippines and the Civil Code.

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cpdeu2025
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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A.

Contract of Insurance

An insurance contract is a consensual agreement whereby one party, the insurer, for a consideration
known as the premium, promises to pay another, the insured or a designated beneficiary, a sum of
money or its equivalent upon the destruction, damage, or loss of something in which that other has an
interest. The contract is governed by the Insurance Code of the Philippines (ICP) and the Civil Code.

a. Requisites of a contract of insurance

To be valid, an insurance contract must have the following requisites:

1. Consent of the contracting parties: The insurer and the insured must mutually agree to the
terms.

2. Object of the contract: The contract's object is the insured's interest, which is subject to the
risk.

3. Cause of the contract: The premium is the cause for the insurer, while the insurer's promise to
indemnify is the cause for the insured.

4. A risk of loss or damage that is uncertain to occur.

5. An insurable interest of the insured in the subject matter.

6. A premium paid by the insured.

7. A promise to indemnify in case of loss or damage.

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