Insurable interest exists when an insured person derives a financial or other kind of benefit from the continuous existence of the insured object (or in the context of living persons, their continued survival). A person has an insurable interest in something when loss-of or damage-to that thing would cause the person to suffer a financial loss or other kind of loss.
Typically, insurable interest is established by ownership, possession, or direct relationship. For example, people have insurable interests in their own homes and vehicles, but not in their neighbors' homes and vehicles, and certainly not those of strangers.
The "factual expectancy test" and "legal interest test" are the two major concepts of insurable interest.
Read more about Insurable Interest: Historical Background, Property Insurance, Life Insurance, Credit Default Swaps
Famous quotes containing the word interest:
“Indiana was really, I suppose, a Democratic State. It has always been put down in the book as a state that might be carried by a close and careful and perfect organization and a great deal of—[from audience: “soap”Ma reference to purchased votes, the word being followed by laughter].
I see reporters here, and therefore I will simply say that everybody showed a great deal of interest in the occasion, and distributed tracts and political documents all through the country.”
—Chester A. Arthur (1829–1886)