A Video Explaining Insurable Interest

Read the full article at https://www.linkedin.com/pulse/insurable-interest-first-party-property-insurance-zalma-esq-cfe and see the full video at https://rumble.com/vod606-insurable-interest-and-first-party-property-insurance.html and at https://youtu.be/bF-MhPgsQBA and at https://zalma.com/blog plus more than 3950 posts.

It may be said, generally, that any one has an insurable interest in property who derives a benefit from its existence or would suffer loss from its destruction. An insurable interest in property is any right, benefit or advantage arising out of or dependent thereon, or any liability in respect thereof, or any relation to or concern therein of such a nature that it might be so affected by the contemplated peril as to directly damnify the insured.

The term “interest,” as used in the phrase “insurable interest,” is not limited to property or ownership in the subject matter of the insurance. An insurable interest in property may arise from some liability which an insured incurs with relation thereto. Such liability may arise by force of statute or by contract, or may be fixed by law from the obligations which insured assumes.

Moreover, an insurable interest in property does not necessarily imply a property interest in, or a lien upon, or possession of, the subject matter of the insurance, and neither the title nor a beneficial interest is requisite to the existence of such an interest. It is sufficient that the insured is so situated with reference to the property that he would be liable to loss should it be injured or destroyed by the peril against which it is insured. For instance, although a person has no title, legal or equitable, in the property, and neither possession nor right to possession, yet he has an insurable interest therein if it is primarily charged in either law or equity with a debt or obligation for which he is secondarily liable. [Belton v. Cincinnati Ins. Co., 353 S.C. 363, 577 S.E.2d 487 (S.C. App. 2003)]

Insurable interest is a keystone of the concept of insurance, safeguarding the insurer against the risk that arises if one who will receive the monetary benefit from loss of the insured property (or life, [in the case of life insurance,]) has no interest in the property not being destroyed. [Woods v. Independent Fire Insurance Co., 749 F.2d 1493, 1496 (11th Cir. 1985)] It is well settled across the United States that having title or an ownership interest is not the sole basis for having an insurable interest in property. [Brown v. Ohio Cas. Insurance Co., 239 Ga.App. 251, 253(2), 519 S.E.2d 726 (1999)] Rather, the test of insurable interest in property is whether the insured has such a right, title, or interest therein, or relation thereto.

© 2021 – Barry Zalma

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