Insurable Interest

Insurable Interest= V. Ramakrishna-DNA
In late 1800s- An old man who was v. sick was about to die in Lebanon County,Penn.

6 men unrelated decided to insure him. Somehow he never died, Finally they murdered him.But later they were caught & hanged.
If the principle of insurable interest were present , old man would not have died.

What is insurable interest?
In order to have a valid Ins. Policy , policyholder must
· Gain a benefit from the continued existence of the subject matter of the Insurance or
· Suffer aloss on its destruction.

Insu interest asks the question

Insurance firms insist on Ins. Interest Its existence guards against the proposal becoming a gamble.,paying premium in the hope of profit.,which is against purpose of insurance.

Who has Insu. Interest?
· * Life Ins.
· Self
· Blood or marriage
· Business Relationships

Property & Liability Ins.
· Ownership
· Secured creditors
· Legal liability
· Contractual Right

When should Insu. Interest exist?
The point at which insurable interest should exist varies between policies that are indemnity-based & otherwise
*Property : Insu interest should exist both at the time of purchase & whena loss occurs
· Marine : Insured is required to have an interest only at the time of loss.
· Life: Insu interest must exist at the time of purchase of life Insurance & not afterward or at the time of claim.

Insu interest is a basic requirement of all types of insurance contracts.

No Ins Int--------No Insurance is a maxim of insurance

Otherwise policies are regarded as void.