On The Principle Of Insurable Interest In Insurance Law

First of all, the paper starts with the basic theories of the principle of insurable-interest involving the origin of the principle of insurable interest and its legislation system. Insurable interest means a sort of relationship of interest which is requested to be existed between the applicants and the subject of the insurance in respect either of economic or of identity. This principle is accepted by legislation of many countries because it helps prevent gambling and wagering, avoid moral hazards and limit the amount of coverage. Then the necessary conditions involved as well as the differences between the terms insurable interest and insurance interest are listed.Second, the principle of insurable interest applied in property insurance is of great difference from that in life insurance. For the property insurance, insurable interest lies with those people who are in possession of a subject or hold it, people responsible for the damage of the accident insured and people who have the factual prospective interest. Meanwhile, whether the shareholders, unwitting buyers and the creditors have the insurable interest or not is still arguable.The third part cares for the principle of insurable interest applied in life insurance. The approval by the insured is a plus besides the interest. Subsequently, much attention was paid on the extension of insurable interest. The other dispute is that who should own the interest on the insured people. As a result, the author maintain that both the insured and the beneficiary art requested to possess the insurable interest.The last part concerns the temporal effectiveness of the principle of insurable interest. When a property insurance contract is executed, the insurable interest is not a must while it has to be presented on the occurrence of the accident insured. Differently, if the insurable interest does not existed on the execution of a life insurance contract, the contract shall be definitely void.