insurable interest

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Insurable Interest

A right, benefit, or advantage arising out of property that is of such nature that it may properly be indemnified.

In the law of insurance, the insured must have an interest in the subject matter of his or her policy, or such policy will be void and unenforceable since it will be regarded as a form of gambling. An individual ordinarily has an insurable interest when he or she will obtain some type of financial benefit from the preservation of the subject matter, or will sustain pecuniary loss from its destruction or impairment when the risk insured against occurs.

In certain jurisdictions, the innocent purchaser of a stolen car, who has a right of possession superior to all with the exception of the true owner, has an insurable interest in the automobile. This is not the case, however, where an individual knowingly purchases a stolen automobile.

Insurable interest is not dependent upon who pays the premiums of the policy. In addition, different people can have separate insurable interests in the same subject matter or property.

insurable interest

noun acceptable insured, acceptable risk, capable of being insured, insurable ownerrhip, insurable risk, insurable stake, legitimate interest, stake, sufficiently close relationships, vested interest
Associated concepts: life insurance

insurable interest

a person has such an interest in property or in the life of a person if damage or destruction of the property or death of the person would expose him to pecuniary loss or liability. See INSURANCE.

INSURABLE INTEREST. That right of property which may be the subject of an insurance.
     2. The policy of commerce, and the various complicated rights which different persons may have in the same thing, require that not only those who have an absolute property in ships or goods, but those also who, have a qualified property in them, may be at liberty to insure them. For example, when a ship is mortgaged, and the mortgage has become absolute, the owner of the legal estate has an insurable interest, and the mortgagor, on account of his equity, has also an insurable interest. 1 Burr. 489. See 20 Pick. 259; 1 Pet. 163.

References in periodicals archive ?
After the accident Prime One eventually declined coverage because it asserted that Petro Mart did not have an insurable interest in the gas pumps, as Bazzi--not Petro Mart--owned the pumps.
The court here found that a court order requiring the ex-husband to cooperate in his ex-wife's attempts to obtain the insurance was not sufficient to create an insurable interest over the objection of the person to be insured.
The first category includes articles pertaining to the (1) insurable interest, (2) applicants' duty to disclose misrepresentations, (3) interpretation of the policy, (4) timely notice of increased risks, (5) insurance fraud, and (6) double insurance.
In order to understand why SPIN-Life policies violate insurable interest laws and should not qualify as life insurance contracts, it is necessary to consider the fundamentals of insurance in general.
In making the distinction between insurance and derivatives contracts used to hedge risks, we should not lose sight of the moral hazard concern that leads to the insurable interest requirement imposed by insurance regulation.
A mortgagee has an insurable interest in property encumbered by a mortgage because it stands as security for the mortgagee's loan.
EXHIBIT 3 Insurable Interests of Each Party for Common Risk Profile Party with insurable interest Coverage required for .
That insurable interest is preserved, however, by refraining from conducting the sale--although that incurs unknown delay and concomitant accrual of interest.
Under Islamic laws, the reinsured party does not get an insurable interest or to reinsure the property of the original insured party without permission from the policyholder.
2) No person shall procure or cause to be procured, directly or by assignment or otherwise any contract of insurance upon the person of another unless the benefits under such contract are payable to the person insured or his personal representatives, or to a person having, at the time when such contract is made, an insurable interest in the person insured.
President Rodrigo Duterte has ordered the creation a temporary Inter-Agency Committee on Government Property Insurance mandated to regulate properties, assets, and insurable interests of the government.