The recovery of a carnapped vehicle does not prevent the 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, said UCPB General Insurance Co., Inc. must pay Wilfrido C. Wijangco for the loss of his stolen Jaguar.

Records showed that Wilfrido’s son, Andrew, was held at gunpoint in a parking lot, and the armed men drove away with the car. The incident was reported to police, and Wilfrido filed an insurance claim with UCPB, submitting all required documents.

UCPB later informed him that the vehicle had been recovered by the Traffic Management Group (TMG) and placed his claim on hold, warning it would close the case unless he submitted a TMG investigation clearance.

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

The Regional Trial Court (RTC) ruled in favor of the claim, holding 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 tribunal reinstated the RTC’s decision, emphasizing that theft is complete once the vehicle is unlawfully taken and recovery does not erase the crime.

Section 249 of the Insurance Code requires insurers to pay claims within specific periods after receiving proof of loss. Once that period lapses and before the insured vehicle is recovered, the insurer’s obligation becomes final, and the insured cannot be compelled to accept the recovered car.

“Insurance would lose its purpose if the insured had to wait indefinitely for recovery or was forced to buy a replacement only to have the original vehicle returned later,” the SC stressed.

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.

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 on the amount. The insurer was also directed to pay P180,000 in attorney’s fees and P200,000 in damages.