Insurance Law
Insurable Interest
A financial or legal interest a person must have in the subject matter of an insurance policy, which is a precondition for a valid insurance contract.
A person can only insure something in which they have an insurable interest — meaning they would suffer a genuine financial loss if the insured event occurred — which is why, for example, a person can insure their own life or property, but generally not a stranger's.
Insurable interest requirements are meant to prevent insurance from being used as a form of speculative wagering rather than genuine risk protection.
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