Insurable Interest


A fire insurance policy cannot be assigned without the permission of the insurer because the insured must have insurable interest in the property at the time of contract as well as at the time of loss. The insurable interest in goods may arise out on account of (i) ownership, (ii) possession (iii) contract. A person with a limited interest in a property or goods may insure them to cover not only his own interest but also the interest of others in them.

Under fire insurance, the following persons have insurable interest in the subject matter:

(a) The owner of the property always has insurable interest in it.

(b) A partner has an equitable interest in the firm's property.

c) A Mortgagee has an insurable interest in the property on which he has lien.

(d) A Pawnee has insurable interest.

(e)Pawn broker also has insurable interest.

(f) Official receiver or assignee in insolvency proceedings has insurable interest.

(g) A Warehouse keeper has insurable interest in the goods of his customer

(h) A person in lawful possession e.g. common carrier ,wharfinger, commission agent has insurable interest in such properties

i) A trustee has insurable interest in the property put on trusteeship

(j) A bailee can insure any property bailed.

(k) An insurer has insurable interest in respect of risks underwritten for the purpose of reinsurance.

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