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1) An open policy is when the value of the thing insured is not agreed upon and the amount of the

insurance merely represents the insurer’s maximum liability. The value of the thing insured shall
be ascertained at the time of the loss.

2) Subrogation is a term describing the legal right held by most insurance carriers to legally pursue
a third party that caused an insurance loss to the insured. This is done to recover the amount of
claim paid by the insurance carrier to the insured for the loss.

3) Yes. The insurance company cannot exempt itself for it is already estopped from invoking the
same. It is a well settled ruled of law that when an insurer which with knowledge of facts entitling
it to treat a policy no longer in force, receives and accepts premium on the policy, is estopped to
take advantage of the forfeiture.

Moreover, what was prohibited was oil and not gasoline. The ambiguity must be strictly
interpreted against the insurance company for the insurance is a contract of adhesion.

4) Yes. The surety is entitled to payment of the premium as soon as the suretyship or bond is
perfected and delivered to the obligor. No contract of suretyship or bonding shall be valid and
binding until and unless the premium therefore has been paid, except where the oblige has
accepted the bond, in which case the bond becomes valid and enforceable irrespective of whether
or not the premium has been paid by the obligor to the surety.

The defense that it did not have authority to issue bond when it has is an admission of fraud
committed against Gegroco. No person can claim benefit from the wrong he himself committed.

5) The insurer is not liable. Clearly the company did not consider the partial payment as sufficient
consideration for the reinstatement. Appellants failure to remit the balance before the death of
his wife operated to deprive him of any right to waive the policy and recover the face value.

The company has the right to deny the reinstatement if it is not satisfied as to the insurability
of the insured and the latter does no pay all over due premiums and all other indebtedness to the
company.

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