Page 10 - Life Assurance

can collect if able to demonstrate that a
financial loss has occurred.

However in many cases a loss occurs when
an individual is not a legal owner. In other
words, ownership is not the only evidence of
insurable interest. For example, if C leases a
building under a long-term lease whereby the lease
may be cancelled if first destroys a certain
percentage of the value of the building. C has an
insurable interest in the building because of the
lease.

2- Royalties : There are other rights under
contract, which are sufficient to establish an
insurable interest in property and the continued
existence of the right affects the contract and its
value to the insured.

Thus, the holder of a contract to receive oil
royalties has an insurable interest in the oil
property so that in the event of an insured loss,
indemnity can be collected, the amount of
indemnity being measured by the reduction in
royalty resulting from the insured loss.

3- Likewise, legal ability growing out of
contracts establishes insurable interest in
property.

For example, garage operators have an
insurable interest in the stored automobiles for
which they have assumed liability.

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