No.

15 Construction of Insurance Contract by Valero OE

Philamcare v CA (G.R. No. 125678. March 18, 2002)
Facts: In 1988, E rnani Trinos applied for a health care insurance under the Philamcare Health
Systems. He was asked if he was ever treated for high blood, heart trouble, diabetes, cancer, liver
disease, asthma, or peptic ulcer; he answered no. His application was approved and it was effective for
one year. His coverage was subsequently renewed twice for one year each. While the coverage was
still in force in 1990, Ernani suffered a heart attack for which he was hospitalized. The cost of the
hospitalization amounted to P76,000.00. Julita Trinos, wife of Ernani, filed a claim before Philamcare
for them to pay the hospitalization cost. Philamcare refused to pay as it alleged that Ernani failed to
disclose the fact that he was diabetic, hypertensive, and asthmatic. Julita ended up paying the hospital
expenses. Ernani eventually died. In July 1990, Julita sued Philamcare for damages. Philamcare
alleged that the health coverage is not an insurance contract; that the concealment made by Ernani
voided the agreement.
ISSUE: Whether or not Philamcare can avoid the health coverage agreement.
HELD: No. The health coverage agreement entered upon by Ernani with Philamcare is a non-life
insurance contract and is covered by the Insurance Law. It is primarily a contract of indemnity. Once
the member incurs hospital, medical or any other expense arising from sickness, injury or other
stipulated contingent, the health care provider must pay for the same to the extent agreed upon under
the contract. There is no concealment on the part of Ernani. He answered the question with good faith.
He was not a medical doctor hence his statement in answering the question asked of him when he was
applying is an opinion rather than a fact. Answers made in good faith will not void the policy.
Further, Philamcare, in believing there was concealment, should have taken the necessary steps to void
the health coverage agreement prior to the filing of the suit by Julita. Philamcare never gave notice to
Julita of the fact that they are voiding the agreement. Therefore, Philamcare should pay the expenses
paid by Julita.m