In the Philippine legal and commercial landscape, documentation is the bedrock of any claim. Whether you have lost a stock certificate, a vehicle registration, or a land title, the road to recovery often begins with a sworn statement and ends with a proof of cleared obligations.
If you are dealing with insurance claims or property transfers, understanding how to prepare an Affidavit of Loss and how to secure a Certificate of Full Payment is essential.
Part I: The Affidavit of Loss
An Affidavit of Loss is a legal document where a person (the affiant) declares under oath the circumstances surrounding the loss of a specific item or document. It serves as prima facie evidence of the loss, allowing institutions to issue replacements or process claims.
1. Essential Elements of the Affidavit
To be legally sufficient for insurance companies or government agencies (like the LTO or Registry of Deeds), the affidavit must contain:
- The Affiant’s Details: Full name, citizenship, civil status, and residence.
- Description of the Item: Specific details (e.g., Policy Number for insurance, Plate/Chassis Number for vehicles, or Serial Numbers for gadgets).
- Circumstances of Loss: A brief but factual narration of how, when, and where the item was lost or discovered missing.
- The "No-Transfer" Clause: A statement that the item has not been sold, pledged, or mortgaged to any other person.
- The Purpose: Explicitly stating that the document is being executed to support an insurance claim or a request for a duplicate.
2. The Legal Process
- Drafting: Ensure the facts are precise. Inaccuracies can lead to a denial of the claim or, worse, charges of perjury.
- Notarization: The document is not "legal" until it is signed in the presence of a Notary Public. You must present a valid government-issued ID.
- Filing: Submit the original notarized copy to the concerned institution.
Legal Note: Under the Revised Penal Code of the Philippines, making untruthful statements in an Affidavit of Loss can make the affiant liable for Perjury (Article 183), which carries the penalty of imprisonment.
Part II: The Certificate of Full Payment (CFP)
A Certificate of Full Payment (sometimes called a Release of Chattel Mortgage or a Certificate of Clearance) is a document issued by a creditor (bank, financing company, or developer) confirming that the debtor has settled all financial obligations related to a specific property or loan.
1. Why do you need it for Insurance?
In many cases, specifically for mortgaged vehicles or real estate, the insurance policy contains a "Loss Payee" clause. This means that if the property is lost, the insurance proceeds go to the bank first.
To claim the proceeds yourself, you must prove the loan is fully paid by presenting the Certificate of Full Payment.
2. How to Request a CFP
- Final Statement of Account: Request a final computation from your bank to ensure there are no lingering "hidden" fees or penalties.
- Formal Letter of Request: Once the balance is zero, submit a formal request for the Certificate.
- Turnaround Time: Banks usually take 15 to 30 days to process this, as it involves clearing the collateral from their technical records.
- Cancellation of Mortgage: If the item is a car or house, the CFP is the primary document used to "cancel" the mortgage entry on the Title or the C.R. (Certificate of Registration).
Comparison of Requirements
| Document | Primary Purpose | Key Requirement |
|---|---|---|
| Affidavit of Loss | To prove an item is missing | Notarization and Factual Narrative |
| Certificate of Full Payment | To prove debt is settled | Zero balance and Bank Clearance |
Practical Steps for Insurance Claims
When an insured item is lost (e.g., a "Total Loss" car accident or theft), follow this sequence:
- Report to Authorities: Obtain a Police Report immediately.
- Execute the Affidavit of Loss: Detail the missing items (e.g., the original OR/CR or the Policy itself).
- Secure the CFP: If the item was under financing, get the bank’s clearance to ensure the insurance check is issued in your name.
- Submit to Adjuster: Provide these documents along with your claim form to the insurance adjuster.
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