Question

Consider the following statements.
I. Incase of the marine insurance, the insurable interest must exist at the time the loss occurs.
II. Incase of fire insurance, insurable interest must exist both at the time of the contract and at the time of loss.
Which of the statements given is/are correct?

• A. I only
• B. II only
• C. Both I and II
• D. Neither I nor II

Answer 1

Answer: (C)

Both I and II

1. In a marine insurance contract the presence of insurable interest is necessary only at the time of the loss. It is immaterial whether he has or does not have any insurable interest at the time when the marine insurance policy was taken.
2. A person cannot insure the property of a third party, because he does not have an insurable interest in it. In case of fire insurance, insurable interest must exist both at the time of contract and at the time of loss.
3. It is not necessary that he should have insurable interest at the time of maturity also.