Multiple choice

If there is no insurable interest the insurance contract becomes

  1. unenforceable in a Court of Law

  2. illegal

  3. void

  4. voidable
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The person getting an insurance policy must have an insurable interest in the property or life insured. A person is said to have an insurable interest in the property if he is benefited by its existence and be prejudiced by its destruction. Without insurable interest, the insurance contract is void. The ownership of a property is not necessary for establishing insurable interest. A banker has an insurable interest in the property mortgaged to it against a loan.

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