BANKING AFFAIRS

Detailed explanation-1: -A person or entity has an insurable interest in an item, event, or action when the damage or loss of the object would cause a financial loss or other hardships. To have an insurable interest a person or entity would take out an insurance policy protecting the person, item, or event in question.

Detailed explanation-2: -The interest that a person has in something such as a particular property or another individual, which means that the person would suffer a loss should that property or individual be harmed.

Detailed explanation-3: -As a rule of thumb, for property insurance, the insurable interest must exist both at the time of purchase of insurance and at the time of occurrence of loss. For life insurance, the insurable interest must exist at the time of purchasing life insurance.

Detailed explanation-4: -You have an insurable interest in something if you would suffer some kind of loss if that person or property were to be lost or damaged. Furthermore, you would benefit financially from that person or property’s continued existence.

Detailed explanation-5: -The Principle of Loss Minimization.