I did'nt understand the concept of insurable interest and subrogation
Hey Zion,
1. Insurable interest: It implies that the insured must have some interest vested in the object which is being insured by him.
Example: A businessperson has an insurable interest in his or her land, house and other properties.
2. Subrogation: Once the compensation is paid, the right of ownership of the damaged property passes on to the insurer, so that the insured cannot sell the damaged property to make profits.
Example: If a person receives Rs 1 lakh for his or her damaged stock, then the ownership of the stock will be transferred to the insurance company and the person will hold no control over the stock.
1. Insurable interest: It implies that the insured must have some interest vested in the object which is being insured by him.
Example: A businessperson has an insurable interest in his or her land, house and other properties.
2. Subrogation: Once the compensation is paid, the right of ownership of the damaged property passes on to the insurer, so that the insured cannot sell the damaged property to make profits.
Example: If a person receives Rs 1 lakh for his or her damaged stock, then the ownership of the stock will be transferred to the insurance company and the person will hold no control over the stock.