MENU

What is insurable interest?

Insurable interest means you must stand to suffer a direct financial loss if there is a claim.When insuring an asset the insurance company will want to establish that you have an insurable interest in the property. I.e. You must stand to suffer a direct financial loss if there is a claim. An insurance company might not wish to cover your asset if you are not directly responsible for it.

An individual has an insurable interest in something when loss or damage to it would cause that individual to suffer a financial loss or certain other kinds of losses. For example, if your car is damaged in an accident, the value of your car has been reduced, and whether you pay to have your car repaired or sell it for scrap, you have suffered a financial loss resulting from the accident.