Insurable Interest in United States

Insurable Interest Definition

Such an interest in a subject of insurance as will entitle the person possessing it to obtain insurance. In the law of fire insurance, an insurable interest may be defined as such an interest as would entail a pecuniary loss were the , property destroyed. 62 N. Y. 47. In the law of life insurance, an insurable interest in the life of another is such a relation that the death of such person would entail pecuniary loss. Any relationship resulting in dependence, or giving a right to service or support, gives an insurable interest to the person benefited. 12 Mass. 115; 57 Vt. 496; 66 Mo. 63. A creditor has an insurable interest in the life of his debtor. 23 Conn. 244.

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Legal Issue for Attorneys

Such an interest in a subject of insurance as will entitle the person possessing it to obtain insurance. In the law of fire insurance, an insurable interest may be defined as such an interest as would entail a pecuniary loss were the , property destroyed. 62 N. Y. 47. In the law of life insurance, an insurable interest in the life of another is such a relation that the death of such person would entail pecuniary loss. Any relationship resulting in dependence, or giving a right to service or support, gives an insurable interest to the person benefited. 12 Mass. 115; 57 Vt. 496; 66 Mo. 63. A creditor has an insurable interest in the life of his debtor. 23 Conn. 244.

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This definition of Insurable Interest is based on The Cyclopedic Law Dictionary. This entry needs to be proofread.

Practical Information

Note: Some of this information was last updated in 1982

A person has an insurable interest if he or she might be financially injured by the occurrence of the event insured against. Under American law, if an insurable interest is not present, the contract is a mere wager and is not enforceable.

Insurable Interest in Property

Insurable interest must exist at the time the loss occurs. Title to the property insured is not necessary; an owner, lessee, mortgagee, or purchaser has an insurable interest. Thus, the interest (a) may be contingent, as the interest of a purchaser under contract of sale; (b) may be conditional, as the interest of a purchaser under a contract of conditional sale (in U.S. law) until the conditions of the sale have been met; (c) may arise from possession as in the case of a bailee (see bailment (in U.S. law)).

Insurable Interest in Life

Insurable interest must exist at the time the policy is written but need not exist at the time death occurs. Every person has insurable interest in his or her own life and may name anyone desired as beneficiary. Other examples of relations giving rise to an insurable interest are those of (a) employer and valued employee; (b) several partners of a partnership; (c) creditor and debtor; (d) corporation and its officers; (e) wife and husband; (f) dependent children.

(Revised by Ann De Vries)

What is Insurable Interest?

For a meaning of it, read Insurable Interest in the Legal Dictionary here. Browse and search more U.S. and international free legal definitions and legal terms related to Insurable Interest.

Insurable Interest (Performance)

This section introduces, discusses and describes the basics of insurable interest. Then, cross references and a brief overview about Performance is provided. Finally, the subject of Sales in relation with insurable interest is examined. Note that a list of cross references, bibliography and other resources appears at the end of this entry.