- An asset or something of worth that an entity derives some form of benefit from and would have a reason to insure for its loss. For physical assets, insurable interest typically only exists for things the entity has partial or full ownership of. For example a person could apply for insurance coverage on their home, but not their neighbour's home. Likewise, an individual could take out a life insurance policy for a spouse or a business partner but not a complete stranger.
vested interest, legitimate insurable interest, right to insure, stake
Related Terms and Acronyms
- Adequacy of Coverage — Definition,
- An assessment of how well an entity's property and assets are insured against potential losses.
- Business Continuation Insurance — Definition,
- Insurance that provides coverage in the event that someone integral to the operation of a business dies or becomes disabled.
- Business Life Insurance — Definition,
- Life insurance that provides coverage in the event that a person key to the operation of a business dies.
- Entity-Purchase Agreement — Definition,
- A plan used for businesses with multiple owners where insurance policies are taken out for each owner in the amount of their ownership stake.
- Financing Entity — Definition,
- An entity that purchases an insurance policy or settlement contract.
- First Loss Insurance Policy — Definition,
- An insurance policy where the policyholder under-insures their assets and will only receive partial coverage in the event of a loss.
- Insurance Policy — Definition,
- A legal contract between an insurer and entity that specifies what the insurer is required to cover and any benefits the insured entity is entitled to.
- Life Insurance — Definition, Very Important,
➥ CanEquity offers life insurance.
- An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
- Loss Payable Clause — Definition,
- An insurance policy provision for payment of a claim to someone, other than the insured's interest in the insured property. This clause basically allows an insurer to make payments to a third party in certain circumstances.
- Property Insurance — Definition,
- Insurance that provides coverage for damages to property from a number of perils.
- Single Interest Insurance — Definition,
- Insurance that covers a single party when more than one party has a stake in a property.
- Stranger Originated Life Insurance (STOLI) — Acronym,
➥ Illegal in many Canadian provinces.
- A life insurance policy purchased by someone without any insurable interests with the insured person.
- Underinsurance — Definition,
- When the amount of insurance coverage on an asset is less than the asset's full value.
- Valuable Papers Insurance — Definition,
- Insurance that covers damages to valuable papers such as property deeds or wills.
- Value Reporting Form — Definition,
- A form used to keep track of a business's current inventory value.
- Work and Materials Clause — Definition,
- A provision that allows the policyholder to store certain materials in insured property if needed by their line of work.