Page 58 - Ebook IC S01
P. 58
Survey And Loss Assessment IC-S01
Insurable interest
All risks are not insurable
Speculative risks are not insurable. Only pure risks are insurable.
Speculative contracts are wagering contracts and are considered to be illegal
Subject matter of a valid contract needs to be legal
The insured must have an insurable interest in the subject of insurance
The financial or pecuniary interest of the policyholder is the subject matter of
insurance and not the subject matter itself
The insured must have a relationship with the subject matter of insurance and he
must be affected by loss or damage to the property
A wager is commonly called a bet
The judgments by the court of law have established the circumstances in which
insurable interest is said to exist:-
A person has unlimited insurable interest in his own life
Husband has an insurable interest in the life of his wife and vice versa
Parents have insurable interest in the lives of their children
The employer has insurable interest in the life of his employee to the extent of
value of the services
Employee has insurable interest in the life of his employer to the extent of
remuneration for the period of his notice
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