Legal Definitions - insurable interest

Insurable interest refers to a legal or financial stake that a person has in a property or event that is being insured. It means that the person will suffer a financial loss if the property or event is damaged or lost.

For example, if you own a car, you have an insurable interest in it because you will suffer a financial loss if it is damaged or stolen. Similarly, if you have a mortgage on a house, you have an insurable interest in the property because you will suffer a financial loss if it is damaged or destroyed.

Insurable interest is important in insurance because it helps to prevent fraud. If someone without an insurable interest in a property or event were allowed to take out insurance on it, they could potentially profit from its loss or damage, which would be unethical and illegal.