Insurance Law - Insurable Interest - Essay Example

Comments (0) Cite this document
Course: Year: Subject: Insurable Interest Student: Tutor: Introduction One of the areas of insurance law that we’ll be analyzing is insurable interest, where the property, object or person to be insures should be of some interest to the insurer and that they would incur a loss of damaged or destroyed, or in the case of a person, the person dies or suffers a disability…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.4% of users find it useful
Insurance Law - Insurable Interest
Read TextPreview

Extract of sample "Insurance Law - Insurable Interest"

Download file to see previous pages Before insurance companies came up with regulations regarding issuance of policies people would take life policies on other people, and if the insured was to surpass the expected life expectancy, some insurers tended to “help them along” so as to get their claims. This presented moral hazards and created to need to come up with insurable interests. Analysis In property insurance when a policy is to be taken, insurance companies ensure that insurable interest is shown to the property. In a case where no loss was incurred, then the insurer is not paid anything (Evans 1912). Insurable interest also serves to reduce intentional losses and damage, before this was enforced, people used to take out policies on property and intentionally destroy the property so as to get the claim, but with insurable interest when the insurer has taken a policy on a property that they have an interest in, they are less likely to intentionally cause damage to it. This serves to significantly reduce the number of bogus claims. The issue of valuation also arises, being that some policies will only pay of the value of the property even with insurable interest; the valuation question is still unresolved and highly controversial. The main difference in the application of insurable interest in property insurance and life insurance is that, when it comes to property, it proves essential. For example, if an insurance policy of 100.000 is taken on a house, at a premium of 300 per year. If the insurer doesn’t lose anything if the house is destroyed, then the insurer will be betting 300 every year that something happens to the house. Insurance policies should not be incentive for people to destroy property, just to claim. Non indemnity insurance, valued insurance, is when the policy holder is entitled to a certain amount if the insured property is damaged. If insured against fire, even if the fire does not do as much damage, the insurance still pays the claim. The contrast comes is life insurance where the insurance should change the insurable interest policy and change it with, the right to give consent, although this might be a bit complex, as in the example of someone who takes life insurance and sells it, as seen if the case of Arthur Kramer who took a life insurance policy of 56 million dollars and sold it to investors. When he died, his family could not claim anything, this led to long court battle for ownership. Life insurance, which engulfs other aspects as critical illnesses or accident, may be taken by a person on themselves for any amount. The law also allows one to take out a policy on a spouse or civil partner recognized by law (Dobbyn 2003). It does not however cater for natural affection or cohabitants. Therefore the law requires that for one to take a life insurance policy on another there must be reasonable interest, but this begs the question, how much interest? And how does one get to measure this? It comes down to the degree, which creates ambiguity. Although the law permits the insurance of a spouse, it does not have further specifications like, if the spouse is abusive, or is abused, should the allow for giving of consent. The law also holds that if you have pecuniary interest in a person you can take a life policy on them, for example business partner because the law will likely permit this, but then the business might fall, or a fallout occurs. Then there will be no more interest ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Insurance Law - Insurable Interest Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved de
(Insurance Law - Insurable Interest Essay Example | Topics and Well Written Essays - 750 Words)
“Insurance Law - Insurable Interest Essay Example | Topics and Well Written Essays - 750 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Insurance Law - Insurable Interest


...?Insurance Law Question 1A: P&I and H&M Protection and indemnity (P&I) together with hull and machinery (H&M) are the two main types of marine insurance coverage.1 H&M is for the most part property cover in that its purpose is to insure the vessel’s actual value or any cost incurred relative to repairing or replacing the vessel. The hull refers to the ship itself and includes the ship’s engine. The hull also refers to the ship’s bunkers or fuel.2 In other words, H&M provides protection of the “shipowner’s investment”.3 P&I covers third party liabilities which are not a part of the H&M cover and as such compliments H&M insurance cover. Additional...
20 Pages(5000 words)Coursework

International Insurance law

...could not use, simultaneously, the Courts. Moreover, the relevant procedure was not clear, leading to mistakes regarding the rules used for supporting claims (Law Commission, Consumer Insurance 2011). 3. Conclusion The principle of utmost good faith has been used in order to serve a series of needs, in the context described above; through the years it has been made clear that the above principle promotes mostly the interests of the insurer – referring specifically to the case of the insurance contracts where the principle of utmost good faith is extensively used. On the other hand, it could be noted that such outcome would be unavoidable due to the lack...
16 Pages(4000 words)Essay

Insurance Law to why should there be development of Islamic insurance in Saudi Arabia and UK? Meaning of Islamic Insurance Islamic insurance is mainly guided by Shariah or Islamic laws that forbid business based on unethical practices. Various products of insurance are strongly influenced by Shariah principles that prohibit gain through means like gambling, uncertainties or interest income (Mortuza, 1989; Ismail, 1997,98). Uncertainties are involved in life insurance as the outcome is unknown at the time of entering into contract and could vary. Gambling refers to gain of wealth under some defined conditions and...
6 Pages(1500 words)Dissertation

Marine Insurance Law

...? Marine Insurance Law By s Due Marine Insurance law is developed through legislation andcases. The Marine Insurance Act, 1906 is the legislation that provides us with the basic framework on which the Marine Insurance law operates. Second primary source of this law is the case law formed by precedents. Precedents are the decisions for cases having specific circumstances and these decisions bind the judges to adjudge the future similar cases in the same manner. There are also some precedents that are not binding on the judges but can be used for guidance. A very important aspect of Marine...
9 Pages(2250 words)Essay

Law of Insurance

... Number Word Count: 2591 Law of Insurance Andy and Bhavinda seem to have run into a few issues regarding their insurance policy with UDO Insurance Company Limited. It is important to note that the types of insurance as well as the details of the policy are of utmost importance in determining how each issue may be resolved. The first issue has to do with a mistake in the value of the contents of the house due to Bhavinda agreeing to store her friend's stamp collection worth 90,000. It is important to note that content insurance is a type of indemnity insurance since one insures the amount which may be lost in case of damage/theft within the home.1 The amount paid out depends on the amount actually damaged.2 This differs... from...
8 Pages(2000 words)Case Study

Interest And Property Insurance Policy

...A Study of Fingerprint Analysis - A Historical and Scientific Perspective Our fingerprints are formed by the twenty first week after conception. (Dermatoglyphics , 2007) Simply stated, we are identifiable within a short period of time from our creation thus it is logical that our fingerprints would be the most reliable form of identification. Man's interest in hands and fingerprints dates back thousands of years. The use of fingerprints in the analysis of crimes is relatively new but the significance of fingerprints certainly is not. In fact, tracing back as early as 500 BC Babylonian business transactions are recorded in clay tablets that include fingerprints. (Dermatoglyphics, 2007) Additionally, there are documents...
4 Pages(1000 words)Essay

The Doctrine Of Insurable Interest

...Running Head: THE DOCTRINE OF INSURABLE INTEREST The Doctrine Of Insurable Interest of the of the The Doctrine Of Insurable Interest "Insurable interest" is one of the basic concepts of insurance law. It refers to an insured's interest or concern in the non-occurrence of the event insured against. What it precisely entails is not clear and there is indeed widespread uncertainty as to the necessity and import of insurable interest especially in the context of assurance on the life of...
16 Pages(4000 words)Essay

Insurance Law

...Insurance Law Background Information This is a law paper that discusses the emerging issues in reference to insurance law, in Europe. It is evident that the region’s community organization is not comfortable gender inequalities arising in different fields of life. Calculations of insurance premiums as well as, insurance benefits are one of these key areas. They also entail healthcare among others. Law bodies have been working on designing suggestions to improve the situation at hand. It has impacts in different nations both which have incorporated the idea in their legislation and those who are yet to...
9 Pages(2250 words)Essay

Insurance law

...(1906) lays down several aspects of law that govern insurance of maritime cargo and the carriers (ships or any insurable sea vessels). Section 17 is of particular interest to scholars, insurers and the legal sphere for its specificity to the field of insurance.7 The section, touching on the principle of utmost good faith outlines what the insured is supposed to disclose to the insurer at the time of entering an insurance contract.89 Loosely explained from the dimension of an individual intending to take up a life policy (life insurance), the potential...
17 Pages(4250 words)Research Paper

Insurance law

...Insurance law Introduction Insurance can be defined as a contract between two parties, where one party commits itself to pay (indemnify) the other party in case the other party suffers a predetermined risks. The uncertainty surrounding the current life people live has forced people to apply for insurance policies. However, some policies are mandatory as per the constitution of America; for instance, one has to have an insurance cover for any automobile. Classification of insuranceInsurance are classified based on the risk and compensation is done. There are three main types of insurance based on...
3 Pages(750 words)Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Insurance Law - Insurable Interest for FREE!

Contact Us