The recovery of a carnapped vehicle does not prevent its insured owner from receiving full payment under an insurance policy, the Supreme Court (SC) has ruled.

Associate Justice Henri Jean Paul B. Inting, in a decision dated 23 April 2025, for the SC’s Third Division, ordered UCPB General Insurance Co., Inc. to pay Wilfrido C. Wijangco for the loss of his stolen Jaguar.

Records showed Wilfrido’s son, Andrew, was held at gunpoint in a parking lot, where armed men threatened him and drove away with the car.

The incident was reported to the police, and Wilfrido filed an insurance claim with UCPB, submitting all required documents.

The insurance company later informed Wilfrido that the vehicle had been recovered by the Traffic Management Group (TMG).

UCPB placed his claim on hold and said it would close the case unless he submitted a TMG investigation clearance.

With no progress, Wilfrido filed a case against the insurer.

The Regional Trial Court (RTC) granted the claim, ruling that the theft triggered UCPB’s liability regardless of recovery.

The Court of Appeals (CA) reversed the ruling, but the case eventually reached the SC.

The high court reinstated the RTC’s decision and emphasized that theft is complete once a vehicle is unlawfully taken. Recovery does not erase the fact of theft.

Section 249 of the Insurance Code requires insurers to pay claims within specified periods after receiving proof of loss.

Once this period lapses and before the insured vehicle is recovered, the insurer’s payment for the loss becomes final, and the insured cannot be compelled to accept the recovered vehicle.

Insurance, the court said, would lose its purpose if the insured had to wait indefinitely for recovery or buy a replacement only to have the original vehicle returned later.

In this case, Wilfrido filed his proof of loss on 10 October 2006, but UCPB informed him of the recovery 162 days later — well beyond the 90-day legal limit.

Even when recovered, Wilfrido’s Jaguar was unserviceable, missing several parts and showing heavy damage, making the loss effectively permanent.

The SC ordered UCPB to pay Wilfrido P1.8 million in insurance proceeds, plus double interest. UCPB was also directed to pay P180,000 in attorney’s fees and P200,000 in damages.