Doctrine of Insurable Interest

The Doctrine of Insurable Interest is a fundamental principle in insurance, ensuring that the policyholder has a legitimate stake in the item or person being insured. This means you can only insure something you would suffer a financial loss from if it were damaged or lost. For example, you can insure your home or car but not your neighbor's property. This principle helps prevent fraud, as it ensures that people cannot profit from insured events, such as losses or damages, in which they have no financial interest.