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<\/a><\/p>\nMost of us buy insurance.\u00a0<\/strong> We buy insurance for our homes, autos and even our lives.\u00a0 But have you ever consider what would happen if you tried to buy insurance on the building owned by the company you worked for?\u00a0 Any answer other than no will raise red flags.<\/p>\n First off, you most likely can\u2019t buy insurance on the building.\u00a0 You don\u2019t own it.\u00a0 Yes there are instances where you can buy insurance on a building you don\u2019t own.\u00a0 The most common being property you rent where the lease specifically cause for you, the tenant, to provide property coverage.<\/p>\n Second, why do you want coverage for the building?\u00a0 Are you concerned that it will burn or blow down?\u00a0 What will you do with the proceeds?\u00a0 You\u2019re not reasonable for paying off the mortgage.<\/p>\n Before you can buy insurance you should be required to prove that you have an insurable interest.\u00a0 Otherwise the policy will not be valid.<\/p>\n Insurance is based in part, on the Principle of Indemnity, a theory that the insured should be may whole.\u00a0 The principle of indemnity has two requirements:<\/p>\n <\/p>\n <\/p>\n <\/p>\n If not for bullet two above, abusive practices would occur that would drive up the cost of insurance.\u00a0 Along these same lines the insurable interest requirement comes into play. If an insured had no interest they would also have no financial exposure or loss.\u00a0 Any insurance payments received would create a windfall for the insured.\u00a0 That would then be in direct conflict to the above.\u00a0 This would ultimately encourage unethical behaviors.\u00a0 The end result would be an increase in the cost of insurance for all.<\/p>\n <\/p>\n <\/p>\n Can you insure a car that is not title to you?\u00a0 In most cases the answer would be no.\u00a0\u00a0 But there are times when you can.\u00a0 If you lease a car, the As you can see, property ownership is not a required to have an insurable interest.\u00a0 Consider Liability Insurance or Workers Compensation Insurance.\u00a0 Both forms of insurance protect from exposures where there is no property.\u00a0 In both cases an insurable interest exists that are not tied to property of the insured.\u00a0 However, both coverages are in place so that the insured can take ownership of their actions.\u00a0 When actions of an insured lead to loss or damage to others they trigger a financial exposure.\u00a0 This in turn creates an insurable interest.<\/p>\n\n
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Understanding what is an Insurable Interest<\/strong><\/h4>\n
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<\/a> title of the car is not in your name.\u00a0 Even though you don’t own it you can insure it. Your lease agreement places the loss of value (other than normal wear and tear) on your shoulders.\u00a0 The agreement most likely goes a step further, by requiring you to maintain insurance for the term of the lease.\u00a0\u00a0 Bottom-line here is that you to have exposure to a financial loss in the event the vehicle is damaged.\u00a0 Thus giving you, the lessee, an insurable interest in the vehicle.<\/p>\n
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