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The requirement of insurable interest gives legal validity to insurance contracts and distinguishes them from wagers. It may be defined as the legal right to insure, where the right arises out of a pecuniary relationship between the insured and the subject matter of insurance. The destruction or damage to the latter involves the insured in financial loss. Absolute legal ownership is a clear example of insurable interest. Read more
Everyday newspaper, television and other means of communication brings reports of death of number of peoples, naturally or by accident or otherwise. One does not shed a tear at this unless ones near relative or breadwinner or benefactor or friend are among the dead, because one has no interest in their continued existence or death. In other words he has no risk of loss in the death of the person or any motive to support that person’s life. Read more
Utmost good faith – In insurance contracts, the legal doctrine of utmost good faith applies. The insured has the duty to disclose all material facts, which have a bearing on the insurance. A breach of this duty may make the contract void or voidable. The duty of disclosure continues throughout the policy period. Read more
While effecting a renewal of a Fire Policy issued by some other Company, it was observed that the name of the Insured in the original policy was different from the person who came to us for renewal of the policy. On enquiry, he showed me an endorsement which read that “On request of the Insured, with effect from ___, this policy is transferred in the name of ____(The person who wanted to renew the policy). Read more