Page 14 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

also a corollary of the principle of indemnity,
provides that if the same property is insured under
more than one policy, the insured can recover a
rate able proportion of the loss under each policy.
Under no circumstances can he recover more than
his loss, and make a profit.

(F) Insurable interest - The requirement of insurable
interest gives legal validity to insurance contracts and
distinguishes them from wagers. It may be defined as
the legal right to insure, where the right arises out of a
pecuniary relationship between the insured and the
subject matter of insurance. The destruction or damage
to the latter involves the insured in financial loss.
Absolute legal ownership is a clear example of insurable
interest.

For e.g, a bank or a financial institution which has

advanced money on the security of a property, has

insurable interest in that property. In Fire insurance policy,

the insurable interest should exist at the time of taking

the policy, throughout its currency period and also at the

time of loss/claim. Fire insurance policies are personal

contracts, so if the property is sold or transferred, the

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