The Taiwan High Court rendered the 106-Bao-Xian-Shang-10 Decision the “Decision”) on November 8, 2017 in which it held that if the insured movable property has changed, the insurer would be obliged to re-appraise and re-underwrite such property.
Plaintiff and Defendant had entered into the First Insurance Commercial Personal Property Floater Policy agreement (the Original Policy) for the guest house at issue before the parties entered into the current policy at issue after the guest house launched a new development project. A fire subsequently broke out at the guest house, and Defendant was arguing that the depreciation period for the insurance shall be calculated based on the Original Policy. Plaintiff, on the other hand, thought it needs to be re-calculated again after the new policy came into effect, hence Plaintiff is suing to claim insurance benefits.
According to the Decision, although the policy at issue indicated that it was a continuation of the Original Policy, there has been a change to the building development project sold by the same guest house development project; if the purpose of use for a building changed from commercial, residential or public use, its movable property value and risk profile will also be different. Therefore, the insurer is certainly obligated to re-appraise and re-underwrite a completely different piece of movable property. Since the insured object under the policy at issue is a different piece of commercial movable property located in the same stored place, it is not the same insured object under the Original Policy, thus the depreciation of the policy at issue shall be calculated based on the policy at issue instead of being combined with the Original Policy. Moreover, the fact that the policy contained a remark notifying the applicant that the criteria for requesting an insurance claim is based on “daily depreciation” instead of stating daily depreciation based on the commencement of the Original Policy. As a result, Defendant’s position is unpersuasive.
The Decision then concluded that Plaintiff’s claim for Defendant to further pay NT$11,987,930 plus a 10% annual interest until the date of repayment based on the legal relationship under the insurance contract has a valid basis, and the Decision was rendered in favor of the Plaintiff.