Chapter 4: Insurable Interest

Question 1

what is insurable interestq

Answer 1

legal right to insure arising out of a financial relationship

Question 2

Features of insurable interest

Answer 2

Legal relationship
financial
insurers’ insurable interest
anticipated insurable interest

Question 3

subject matter of insurance

Answer 3

type of insurance product

Question 4

subject matter of contract

Answer 4

financial interest a person has in subject matter of insurance

Question 5

legal relationship

Answer 5

recognised via ownership

Question 6

insurers’ insurable interest

Answer 6

insurers share risks with other insurers- reinsurance

Question 7

general insurance contracts

Answer 7

insurable interest must exist both at inception and time of loss
contracts of indemnity

Question 8

Gaming Act 1845

Answer 8

extended requirement for insurable interest beyond life insurance- act made contracts of gambling void

Question 9

gambling act 2005

Answer 9

fact that contract relates to gambling shall not prevent its enforcement

Question 10

anticipated insurable interest

Answer 10

expectation of acquiring insurable interest in future may not be enough to create insurable interest in general insurance

Question 11

life insurance contracts

Answer 11

insurable interest must exist at inception but need not exist at time of loss

Question 12

marine insurance contracts

Answer 12

insurable interest must exist at time of loss but not at inception

Question 13

Marine Insurance Act 1906

Answer 13

any marine insurance contract was void in absence of insurable interest at time of loss
insurable interest for this class is not required but reasonably expected at time of entering contract and required at time of loss

Question 14

marine insurance act 1901

Answer 14

criminal offence to effect marine policy where no insurable interest

Question 15

how is insurable interest created

Answer 15

common law
contract
statute

Question 16

common law

Answer 16

rights under common law give rise to insurable interest- ownership

Question 17

contract

Answer 17

situations where we accept greater liability - EG landlords

Question 18

statutes modifying insurable interest

Answer 18

restrict liability and insurable intereest- Carriage of Goods by Sea Act 1971

Question 19

Property insurance

Answer 19

arises out of ownership- insured is the owner of subject matter of insurance- also instances where insurable interest arises when insured is not the full owner of subject matter:

Question 20

joint/ part owners of property

Answer 20

insurable interest up to limit of their financial interest
can insure property for its full value

Question 21

bailee

Answer 21

someone holds property on temporary basis- insurable interest in property as if damaged they will have to replace EG- garage owners, dry cleaners

Question 22

Tenants

Answer 22

not owner of property but insurable interest as in event of damage they may have to pay for repair

Question 23

shareholders

Answer 23

dont have insurable interest- interest limited to value of shares they own- doesn’t extend to physical property owned by companyli

Question 24

liability insurance

Answer 24

under common law- person has insurable interest to extent of any potential legal liability they may incur