Insurable Interest Law and Legal Definition
Insurable interest is the interest that a person has on a property which is insured. A person has an "insurable interest" in something when loss or damage to it would cause that person to suffer a financial loss or certain other kinds of losses. Person who buys a policy must have an insurable interest in the subject of the insurance.
In every type of insurance there exists an insurable interest:
1. at the time of insuring; and
2. at the time of loss.
But the insurable interest exists whether at the time of insuring or at the time of loss depends upon the type of insurance.
In a life insurance policy insurable interest need to exist only at the time of insuring the life of a person. In case of marine insurance the insurable interest is only looked into at the time of claiming for the loss or damage. In case of fire insurance and auto insurance the element of insurable interest need to be present both at the time of insuring and also at the time of loss.
