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Insurable interest

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HomeBrud.gifInsurance LawBrud.gifInsurable interest
  • A person can insure anything in which he or she has an insurable interest.
    • Any person having an insurable interest must have some reasonable expectation of benefit from the continued life of another.
    • Insurable interest must exist at the time of obtaining the policy. Policy will remain valid even when insurable interest no longer exists (as in the case of a Divorce).
    • Types of insurable interests: Life, key-person life insurance, property.
    • In a Key-person Insurance, a company has an insurable interest on the life of an important person (business partner, director or employee) of the company.
    • A Property Insurance can be taken by a person who has a pecuniary benefit in the continued existence of the property. Insurable interest must exist when the loss occurs. Sotelo v Washington Mutual Insurance Company (1999)