Question

principle of insurable interest is a fundamental principle of insurance . explain when it should be present in case of life insurance , fire insurance and marine insurance

Answer 1

Dear student,

According to the principle of insurable interest, the insured must have some interest vested in the object which is being insured by him, in the absence of which the insurance policy is considered as a gamble and the contract will be void.

It must be present in different types of insurance in the following manner:

Life insurance: At the time of taking the policy and not necessarily at the time of receiving the claim.

Fire insurance: Both at the time of taking the policy and receiving the claim

Marine insurance: Only at the time of receiving the claim or at the time of loss.
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