The Insurance Policy

The insurance policy is the formal written evidence of the contract's existence. As such, it has to be in the form approved (not prescribed) by the Insurance Commission. Though the Insurance Code doesn't prescribe the form, it does require certain provisions that must be inserted into the policy. The policy is not, however, necessary for the insurance contract's perfection. 

Contents

1.) Parties

2.) Amount of insurance (except in open or running policies)

3.) Rate of premium

4.) Property/life insured

5.) Interest of the insured in the property (if he's not the absolute owner)

6.) Risk insured against

7.) Lifetime of the insurance contract

Riders

A rider is an attachment to the policy that contains additional stipulations between the parties. It is issued after the policy is delivered and can modify the policy's conditions by either expanding/restricting its benefits or excluding certain conditions from the coverage. It isn't binding on the insured unless its descriptive title/name is written in the blank spaces provided for in the policy itself. If properly attached to the policy, it forms part of the contract with the effect that it has been embodied in the policy (Ang Giok Chip vs. Springfield, 56 Phil 275.)

Riders are necessary because they save the parties the trouble of drawing up a new contract by simply attaching later provisions that were agreed on. Consequently, in case of a conflict between a rider and the policy, the rider prevails.

A rider has to be countersigned by the insured/owner if he didn't apply for it.

Kinds of Policies:

1.) Open

The value of the thing insured isn't agreed on but left to be determined at the time of loss.

2.) Valued

The value is agreed on and written in the policy. All life insurance policies are valued.

3.) Running

Contemplates successive insurances and provides that the object of the policy can be defined by additional statements and indorsements from time to time. You can find this in insurance on goods/merchandise that constantly change in quantity so that changing their values from time to time is necessary.