Thailand Law Library

by Thailand Lawyer

Chapter 2: Insurance Against Loss

"Loss", within the meaning of this Chapter, includes any injury which may be estimated in money.

If two or more contracts of insurance are made simultaneously for the same loss and the total amount of the sum insured exceeds the actual amount of the loss, the beneficiary is entitled to receive compensation up to such amount only. Each insurer must pay a part of the actual loss in proportion to the sum insured by him.

Contracts of insurance are deemed to have been made simultaneously if their dates are the same.

If two or more contracts of insurance are made successively, the first insurer is first liable for the loss. If the amount paid by him is not sufficient to cover the loss, the next insurer is liable for the difference and so on, till the loss is covered.

If two or more contracts of insurance are made simultaneously or successively, a renunciation of the right against one of the insurers does not affect the rights and duties of the others.

Before the risk begins, the insured may terminate the contract, but the insurer is entitled to one half of the premium.

If, during the period of insurance, the insurable interest is substantially reduced, the insured is entitled to a reduction of the sum insured and of the premium.

The reduction of the premium shall take effect only for the future.

If the parties have valued the insurable interest, the insurer is entitled to a reduction of the amount of compensation only if he proves that the agreed valuation is substantially too high and returns a proportionate amount of the premiums with interest.

If the subject of insurance passes from the insured by will or operation of law, the rights under the contract of insurance are transferred with it.

Unless otherwise provided by the contract, if the insured transfers the subject of insurance and notifies the transfer to the insurer, the rights under the contract of insurance are transferred with it. If, by such transfer, the risk is substantially altered or increased, the contract of insurance becomes void.

If the insurer has been adjudged bankrupt, the insured may require proper security to be given him or may terminate the contract.

If the insured is adjudged bankrupt, the same rules shall apply correspondingly; however when the whole amount of the premium has been paid for a certain period of time, the insurer cannot terminate the contract before such period expires.

The insurer is bound to pay compensation for:

1. The actual amount of the loss;
2. The damage caused to the insured properly by reasonable measures taken for preventing the loss;
3. All reasonable expenses incurred for preserving the insured properly from the loss. The actual amount of the loss shall be valued at the place where, and at the time when, the loss occurred. The sum insured is presumed to be a correct basis for such valuation.

The compensation cannot exceed the sum insured.

The expenses for valuation of the loss must be borne by the insurer.

The insurer is not liable if the loss or other event specified in the contract is caused by the bad faith or the gross negligence of the insured or the beneficiary.

The insurer is not liable for loss resulting directly from the inherent vice of the subject of insurance unless otherwise provided.

If the loss is caused by the act of a third person, the insurer who pays compensation is subrogated, up to the amount paid by him, to the rights of the insured and of the beneficiary against such third person.

If the insurer has paid part only of the compensation, he cannot exercise his right to the prejudice of the right of the insured or of the beneficiary to claim from the third person for the remainder of the loss.

When a loss occurs from the happening of the risk assumed by the insurer, the insured or the beneficiary must after he had knowledge of such loss, without delay give notice thereof to the insurer.

If the provision of the foregoing paragraph is not complied with, the insurer can claim compensation for any damage suffered thereby unless the other party can prove that it is impracticable for him to comply with.

No action for payment of compensation can be entered later than two years after the date of the loss.

No action for payment or refund of a premium can be entered later than two years after the date when the right to payment or ref und of premium became due.