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:
“I believe, as Maori people do, that children should have more adults in their lives than just their mothers and fathers. Children need more than one or two positive role models. It is in your children’s best interest that you help them cultivate a support system that extends beyond their immediate family.”
—Stephanie Marston (20th century)