Can someone explain why we needn't have insurable interest at the time of insurance(in case of marine insurance) and only when the claim occurs?
Dear student,
Insurable interest is an essential element of a valid contract. Marine Insurance contract is one in which the insurer promises to indemnify the insured against loss to the insured subject (either ship, cargo, etc.) subject to conditions and extent of the policy.
In case of marine insurance, insurable interest must exist at time of loss, its not necessary to have insurable interest at time of taking policy. Even if the insured is not interested in the subject matter of insurance at time of taking policy, the policy will be considered valid. For insurable interest there should be an object which is exposed to sea perils and assured must have legally recognized relationship with that object such that he benefits by its preservation and prejudiced by its loss or damage.
Regards
Insurable interest is an essential element of a valid contract. Marine Insurance contract is one in which the insurer promises to indemnify the insured against loss to the insured subject (either ship, cargo, etc.) subject to conditions and extent of the policy.
In case of marine insurance, insurable interest must exist at time of loss, its not necessary to have insurable interest at time of taking policy. Even if the insured is not interested in the subject matter of insurance at time of taking policy, the policy will be considered valid. For insurable interest there should be an object which is exposed to sea perils and assured must have legally recognized relationship with that object such that he benefits by its preservation and prejudiced by its loss or damage.
Regards