Insurable interest

[Gareth Keenan]

Did anyone else struggle with this sub-module. Is there an easier way to think about Insurable interest. At the most fundamental level, Insurable interest is like "Who gives a sh-t?".\

But it seems like at more appropriate level, insurable interest is another way of saying, "who is justified in expecting indemnification in the event of a covered loss" This doesn't not mean because you have an insurable interest, you can file a claim, but it's just that you have some kind of vested interest in the asset. Or something.

[Vorian Atreides]

I think that in the simplest terms, the main purpose of establishing "insurable interest" is to prevent others from profiting from the damage or destruction of the property in question.

So, if an entity would profit from being paid monies for a damaged/destroyed property, some aspect of insurable interest is likely violated (or perhaps the principle of indemnity if the entity does have some form of insurable interest in the property in question).


An entity has an insurable interest in a particular piece of property (whether tangible or not) if it can answer "yes" to one of the following questions:

Are you the (legal) owner of the property in question?
Is the property in question specified as collateral for a loan you've given to the owner of said property?
Do you have the expectation that you are the (legal) owner of the property in question?
Could the use of the property in question generate a legal obligation on your part (that is, generate a liability law suit) by a third party?

[BlackOpsWhiteNoise]

As for why this criteria is in place, see "Tontine"