Chapter 2 Insurable Interest

LEARNING OBJECTIVES:

Understanding Insurable interest

Learning about the application of insurable interest

Learning about the common features of insurable interest

CONTENTS OF THIS CHAPTER:

Section 1　The definition of insurable interest

Section 2　The application of insurable interest

Section 3　When insurable interest must exist

Section 4　Common features of insurable interest

Figure 2.1

When we talk about insurance, we always talk about the insurable interest. Insurable interest is the basic requirement of a contract of insurance. The party to the insurance contract who is the insured or the policyholder must have particular relationship with the subject matter of insurance, whether it is a life or property or a liability to which he is confronted with. Without the required relationship, the contract will be illegal, void or unenforceable according the different type of insurance.1