Insurance Contract Requirement – Insurable Interest

No matter what you have insured, whether it is your life or just your vehicle, an insurance policy is there to mitigate the risk of damage or loss.

What is insurable interest?

You have an insurable interest in an item if you would suffer a financial loss if the particular property or item is lost, stolen or damaged.  If more than one person, organisation, or business has an interest, the policy name should be extended to include all parties.

A classic example would be when you as a young working person are ready to buy your first vehicle, that will be registered in your own name, and you want to insure it on your parents’ policy.  If you earn your own income and are financially independent, your parents have no insurable interest in the vehicle.  You must therefore take out your own insurance policy.

BUT…. if you are still a student, and your parents financed your vehicle, they have an insurable interest and can therefore insure the vehicle on their policy.

Insurable interest is an essential requirement for insuring assets and if there is no risk of financial loss you can unfortunately not insure the item.

Contact us here and let us help you find solutions that fit your needs.

Although all possible care was taken in the drafting of this document, the factual correctness of the information contained herein cannot be guaranteed. This document does not constitute advice and anyone planning on taking any financial action based on this document, is strongly advised to first consult with their personal financial advisor. ProVérte Risk Management is an authorised financial service provider with FSP no. 51584.

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