Page 9 - Life Assurance

nsurance is a personal contract:

Insurance follows the person and not the
property.

Thus, the policy of insurance is said to be a
personal contract.

A policy can be written covering a certain
piece of property and an individual may be
named as the one who would suffer a financial
loss if the peril were to occur and cause
damage. However, if at the time of the loss the
individual named no longer had an interest in
the property, there would be no liability under
the policy.

For example, suppose that A owns and insures
an automobile. Later A sells the car to B and shortly
thereafter the auto is destroyed A, who has no
further financial interest in the car, cannot collect
under the policy. B has no protection under the
policy since B is not named as an insured or as
having any interest in the auto at the time the policy
was written.

3/3/2 What Constitutes Insurable Interest?

1- Ownership : The legal owner of property
having its value administered by loss resulting
from an insured peril has an insurable interest

50 Life31/life/life 08