Libro IV · Título II · Capítulo X Sección Primera. Disposiciones generales

By the insurance contract, the insurer undertakes to compensate a loss or to pay a sum of money upon the occurrence of the contingency provided for in the contract, and the insured or policyholder undertakes to pay the corresponding premium.

For the purposes of this Code, the following is considered:

1º.Insurer: the commercial company legally authorized to operate insurance, which assumes the risks specified in the insurance contract.

2º.Applicant: the person who contracts the insurance, on his own account or on account of a determined or determinable third party and who transfers the risks to the insurer.

3º.Insured: the person interested in the transfer of the risks.

4º.Beneficiary: the person who is to receive, in case of loss, the product of the insurance.

5º.Premium: the remuneration or price of the insurance.

6º.Risk: the eventuality of any fortuitous event that may cause the loss provided for in the policy.

7º.Loss: the occurrence of the insured risk.

The same person may combine the capacities of applicant, insured and beneficiary.

Certain events, or physically impossible ones, do not constitute a risk and cannot be the object of the insurance contract, except death.

All the provisions of this chapter shall have a mandatory nature in favor of the insured, unless they expressly admit an agreement to the contrary.

Only commercial companies that have obtained the respective authorization may act as insurers.

Whoever, without being duly authorized, in fact assumes the function of insurer, shall return the premiums he has collected and compensate the damages and losses he has caused to his counterparty.

The application to conclude an insurance contract shall only bind the person making it, if it contains the general conditions of the contract.

Applications to extend or modify an insurance contract or to reestablish a suspended one shall be considered accepted, if the insurer does not reject them within the fifteen days following the receipt of the application.

This provision shall not be applicable to applications to increase the insured sum, and in no case to insurance of persons.

The applicant shall be obliged to declare in writing to the insurer, in accordance with the respective questionnaire, all the facts that have importance for the appraisal of the risk, insofar as they may influence the conclusion of the contract, as he knows them or should know them at the moment of making the application.

If the contract is applied for by a representative or by someone acting in the interest of a third party, there shall be declared both the important facts that are or should be known by the applicant, and those that are or should be known by the applicant, by the person on whose account the contract is made.

The insurance contract is perfected from the moment in which the insured or contracting party receives the acceptance of the insurer, and its validity may not be made conditional on the payment of the initial premium or on the delivery of the policy or of an equivalent document.

Insurance may be contracted on account of another, with designation of the person of the insured third party or without it.

If the applicant contracts the insurance in the name of another, without having the power to do so, the insurance binds the insurer and the insured may ratify the contract even at a date subsequent to the loss.

The rights derived from the contract correspond to the insured and the applicant, even when he is in possession of the policy, cannot assert them without the consent of the insured.

With respect to the insured, damage insurances are contracts of simple compensation and in no case may they constitute sources of enrichment for him.

The insurer may take upon himself all or some of the risks to which the insured thing is exposed.

If the insurance is not expressly limited to determined risks, the insurer shall be liable for all of them, except for the legal exceptions.

The insurer shall be obliged to deliver to the insured a policy that must contain:

1º.The place and date on which it is issued.

2º.The names and domicile of the insurer and the insured and the statement, where applicable, that the insurance is contracted on account of a third party.

3º.The designation of the insured person or thing.

4º.The nature of the risks covered.

5º.The term of validity of the contract, with indication of the moment in which it begins and of that in which it ends.

6º.The insured sum.

7º.The premium or fee of the insurance and its form of payment.

8º.The general conditions and other clauses stipulated between the parties.

9º.The signature of the insurer, which may be handwritten or replaced by its printing or reproduction.

The annexes and endorsements must indicate the precise identity of the policy to which they correspond and the renewals, in addition, the period of extension of the validity of the original contract.

In the absence of a policy, the insurance contract shall be proven by the confession of the insurer of having accepted the proposal of the insured, or by any other means, if there is a beginning of proof in writing.

The policies of insurance of things may be nominative, to order or to bearer; those of insurance of persons may only be nominative.

The assignment of the nominative policy shall in no case produce effect without the prior acceptance of the insurer.

The insurer may oppose to the holder of the policy or to the third-party beneficiaries all the exceptions that he has against the policyholder, without prejudice to invoking those that he has against the claimant.

In the event that a policy to order or to bearer is lost or destroyed, whoever considers himself entitled to the insurance may request that, at his expense, the insurer or the Judge of the domicile, if the former refuses, publish a notice in the Official Gazette and in another of those of largest circulation in the country, by means of which it is made known that the policy, whose characteristics shall be described so as to duly individualize it, shall be without any value thirty days after the publication, if no one opposes it.

Once the mentioned time limit has elapsed without opposition, the insurer shall fulfill his obligations with respect to whoever proves his right, even when he does not exhibit the policy.

If the lost or destroyed policy was nominative, the insurer, upon request and at the expense of the insured, shall issue a duplicate that shall have the same probative value as the original.

The premium shall be paid at the moment of the conclusion of the contract, as regards the first period of the insurance, except by agreement to the contrary. Period of the insurance shall be understood as the lapse for which the premium unit is calculated; in case of doubt, it shall be understood to be one year.

The subsequent premiums shall be paid at the beginning of each period.

The premium agreed for the period in course shall be owed in its totality, even when the insurer has covered the risk only during a part of that time.

The insured shall communicate to the insurer the essential aggravations that the risk has during the course of the insurance, on the business day following the one in which he learns of them. For this purpose, it shall be presumed:

1º.That the aggravation is essential if it refers to a fact important for the appraisal of the risk, in such a way that the insurer would have contracted under different conditions, if at the conclusion of the contract he had known an analogous circumstance.

2º.That the insured knows every aggravation that emanates from acts or omissions of his spouse or descendants who live with him.

The type of premiums that impose on the contracting party of the insurance the duty to take determined precautions to mitigate the risk, or to prevent its aggravation, may not have as a consequence the extinguishment of the obligations of the insurer, except in the case that the non-compliance of the insured has influenced the occurrence of the loss or has aggravated its consequences.

As soon as the insured or, as the case may be, the beneficiary, has knowledge of the occurrence of the loss, they shall communicate it to the insurer.

Except by agreement or express provision to the contrary, the notice shall be given in writing and within a time limit of five days. This time limit shall run only against those who had knowledge of the right constituted in their favor.

The insurer shall have the right to demand from the insured or from the beneficiary all kinds of information on the facts related to the loss, by which the circumstances of its occurrence and its consequences may be determined.

The insurer shall be liable for all the events that present the character of the risk whose consequences have been insured, except for those that have been clearly excluded by the contract.

If during the validity of the insurance the general conditions of the contracts of the same kind are modified, to the benefit of the insured and without this implying higher consideration payable by them, the new conditions shall apply to the contracts in force.

If the new conditions require from the insured greater consideration than that originally agreed, they shall apply to the contracts in force, upon application of the insured, who shall have the obligation to pay the corresponding premium difference.

The insured shall give notice to the insurer, when the circumstances by reason of which the premium was fixed disappear or lose their importance, and the insurer shall reduce it in accordance with the respective tariff, if so agreed in the contract, and shall return the part corresponding to the period in course.

In the cases not provided for in the Insurance Law or in a legal provision to the contrary, the payment of the compensation resulting from the insurance contract shall be demandable thirty days after the date in which the insurer has received the documents and information that permit knowing the basis and the amount of the claim.

The clause in which it is agreed that the compensation may not be demanded until after having been recognized by the insurer or proven in court shall be null.

The insurer may set off the premiums and the loans on the policies owed to him by the insured, against the benefit owed to the beneficiary; except by agreement to the contrary, he may not set it off against any credit that he had against them.

The insurer shall be liable for the loss even when it has been caused by negligence of the insured or of the persons with respect to whom he is civilly liable, and only the clause that releases him in cases of gross negligence of the former shall be valid.

Not even if there is an express agreement shall the insurer be obliged if the loss is caused in bad faith by the insured, the beneficiary or their successors.

If the loss is produced as a consequence of the fulfillment of a duty of human solidarity, the insurer shall be fully liable.

Each party must communicate to the other its changes of address. All the extrajudicial requests and communications addressed to the last address of which one party informed the other shall produce their effects, even when the person to whom they are addressed is no longer found there.

The insurance contract shall be null if at the moment of its conclusion the risk has disappeared or the loss has occurred, except by express agreement based on both parties considering that the insured thing is still exposed to the risk provided for in the contract. In this case, the insurer who knew of the cessation or non-existence of the risk shall not have the right to the premiums or to reimbursement of the expenses; the insured who knows that the loss has occurred shall not have the right to compensation or to restitution of premiums.

The agreement to give retroactive effect to the insurance, both parties knowing that they cover a period during which the insured person or thing has been exposed to the risk without the loss having occurred, is only valid if the reference period is less than one year.

In insurances of persons, the clause that empowers the insurer to terminate the contract early is null.

In transport insurances by trip, once the trip has begun, neither of the parties may cancel it.

In all the other cases, notwithstanding the term of validity of the contract, both the insured and the insurer may terminate the contract early without expression of cause, with fifteen days of prior notice given to the counterparty. The premium not accrued shall be returned to the insured in accordance with the respective tariffs.

The omission or inaccurate declaration of the facts to which articles 880 and 881 of this Code refer, give the insurer the right to terminate the insurance contract.

The insurer, within the month following the one in which he knows of the omission or inaccurate declaration, shall serve notice on the insured that he terminates the contract; once this time limit has elapsed without such notice being given, the insurer shall lose the right to invoke it.

The insurer shall have the right, by way of compensation, to the premiums corresponding to the insurance period in course; but if he terminates the insurance before the risk has begun to run, his right shall be reduced to the reimbursement of the expenses incurred.

If the loss occurs before the insurer has made the notice provided for in the preceding article, and the insured has acted without bad faith or gross negligence, the insured sum shall be reduced, if the risk is insurable, to the one that would have been obtained with the premium paid had there been no omission or inaccurate declaration. In the case that the risk is not insurable, the insurer shall be released from the payment of the loss.

If the insured acts in bad faith or with gross negligence, the contract may be terminated, even when the omitted or inaccurately declared circumstance has not influenced the occurrence of the loss.

In spite of the omission or inaccurate declaration of the facts, the insurer may not terminate the contract in the following cases:

1º.If he provoked the omission or inaccurate declaration.

2º.If he knew or should know the fact that has not been declared or that was declared inaccurately.

3º.If he waived challenging the contract for this cause.

4º.If the omission consists of failing to answer any of the questions of the insurer, except that, in accordance with the indications of the questionnaire and the answers of the applicant, such question must be considered answered in a determined sense, which does not correspond to the truth.

If the insurance contract covers several things or several persons, or protects against several risks, and the omission or inaccurate declaration only refers to some of one or the others, the insurance shall be valid for the others, except that the insurer proves that he would not have insured them separately.

If notice of the aggravation is not given, the insured sum shall be reduced in the manner established in article 909 of this Code.

If the contract covers several things or persons or protects against several risks and the aggravation only produces effects with respect to some of them, the insurance shall remain in force for the others, except that the insurer demonstrates that he would not have insured such risks, persons or things separately.

If the insured or the beneficiary does not comply with the obligations to give notice of the loss in the terms of article 896 of this Code, the insurer may reduce the benefit owed up to the sum that would have corresponded if the notice had been given in due time.

The insurer shall be released from his obligations:

1º.If the notice of the loss is omitted with the intention of preventing its circumstances from being verified in due time.

2º.If, in order to make him incur in error, facts referring to the loss that could exclude or restrict his obligations are concealed or declared inaccurately.

3º.If, with the same purpose, the documentation referring to the loss or the proof of loss is not sent to him in due time.

All the actions that derive from an insurance contract shall be time-barred in two years, counted from the date of the event that gave rise to them.

If the beneficiary does not have knowledge of his right, the limitation period shall be completed by the passage of five years counted from the moment in which the obligations of the insurer became demandable.

In addition to the ordinary cases of interruption of the limitation period, it is interrupted by the appointment of experts on the occasion of the occurrence of the loss, by the claim presented to the insurer directly or by means of competent administrative or judicial authority and, if it is the action for the payment of the premium, by demand by means of a simple letter addressed to the last domicile known by the insurer.