Other Free Encyclopedias » Law Library - American Law and Legal Information » Free Legal Encyclopedia: Indirect evidence to Internal Revenue Code

Insurable Interest

subject policy matter benefit

A right, benefit, or advantage arising out of property that is of such nature that it may properly be indemnified.

In the law of insurance, the insured must have an interest in the subject matter of his or her policy, or such policy will be void and unenforceable since it will be regarded as a form of gambling. An individual ordinarily has an insurable interest when he or she will obtain some type of financial benefit from the preservation of the subject matter, or will sustain pecuniary loss from its destruction or impairment when the risk insured against occurs.

In certain jurisdictions, the innocent purchaser of a stolen car, who has a right of possession superior to all with the exception of the true owner, has an insurable interest in the automobile. This is not the case, however, where an individual knowingly purchases a stolen automobile.

Insurable interest is not dependent upon who pays the premiums of the policy. In addition, different people can have separate insurable interests in the same subject matter or property.

User Comments

Your email address will be altered so spam harvesting bots can't read it easily.
Hide my email completely instead?

Cancel or

Vote down Vote up

over 10 years ago

Do agents insure church members in order to maintain a cetain income in the event one of the paying members deceased? Do you have to pay the premiums or can this policy be sold to an investor with money up front to the church assembly?