5 Questions
In insurance contracts, when is insurable interest required?
At the beginning of some contracts and at the end of others
Who can insure a part of a home according to the principle of insurable interest?
Tenant
In insurance contracts, on whom can a creditor have insurable interest?
Debtor by loan value
Who can a father insure based on insurable interest?
Wife, son, and daughter
When does the principle of proximate cause apply in insurance contracts?
At the end of the contract, looking at the cause of the accident
Study Notes
Insurable Interest
- Insurable interest is required when a party enters into an insurance contract to protect their financial interest in the subject matter of the policy.
- Only those with a financial interest or relationship with the subject matter can purchase insurance.
Who Can Insure
- According to the principle of insurable interest, a co-owner or a part-owner can insure a part of a home.
- A creditor can have insurable interest in a debtor's life or property.
- A father can insure his child based on insurable interest, as he has a financial interest in the child's well-being.
Proximate Cause
- The principle of proximate cause applies in insurance contracts when determining the cause of a loss or damage.
- It is used to establish the direct cause of a loss or damage, as opposed to an indirect or remote cause.
Test your knowledge on insurable interest, which is the relationship between the insured and the subject of insurance in insurance contracts. Explore examples and principles related to insurable interest in various insurance scenarios.
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