Asked by theeba tharshini on Jul 18, 2024
Verified
An insurable interest is
A) an interest in goods permitting a party to insure against their damage.
B) an interest in ensuring that goods are of a certain quality.
C) interest that can accrue from investing in insurance of certain goods.
D) none of the choices.
Insurable Interest
A legal requirement for purchasing insurance, indicating that the person buying the insurance must stand to suffer financial loss or hardship from the damage, loss, or destruction of the property insured, or from the death or injury of the person insured.
Insure Against Damage
The act of securing an insurance policy to protect against financial loss due to physical damage to property or goods.
Insurance
A contract by which the insurer promises to reimburse the insured or a beneficiary in the event that the insured is injured, dies, or sustains damage to property as a result of particular, stated contingencies.
- Gain an understanding of the notion of insurable interest throughout various contexts.
Verified Answer
KJ
kelly JohnsonJul 25, 2024
Final Answer :
A
Explanation :
An insurable interest is a requirement in insurance policies that the policyholder must have a stake in the insured item that would cause them to suffer a financial or other types of loss if the item were damaged or lost. This concept prevents people from insuring something they have no financial stake in, thereby reducing the risk of insurance fraud. Choice A accurately describes this concept by stating it is an interest in goods that allows a party to insure against their damage.
Learning Objectives
- Gain an understanding of the notion of insurable interest throughout various contexts.