Insuring Your Future Objective: Identify when an insurable interest is present Bellwork: What kind of property may a person have an insurable interest?

 Insurance is intended to be a personal contract between the insurer and the insured.  A person with contractual capacity can acquire insurance if he or she would suffer loss if the insured property is damaged or destroyed of if the insured person is injured or dies.  This potential to sustain loss is referred to as an insurable interest.

 Any person who would suffer a direct and measurable monetary loss if property were damaged or destroyed has an insurable interest in the property.  Note, however for the insurer to be legally obligated to pay, an insurable interest in property must exist at the time of the loss.  A person may not insure property, then sell it, and expect to be paid if the property is later damaged or destroyed.

 A person need to hold all of the property rights (title, possession, use, a security interest, or some future interest) in the insured property in order to have an insurable interest.  Just one of these rights would be sufficient.  Many individuals may all have an insurable interest in the same property at the same time.

 A person has an insurable interest in his or her own life.  Everyone who meets the insurance company’s requirement and is legally competent may acquire a life insurance policy on themselves.  Would be beneficiaries seeking to take out a policy on another person’s life must demonstrate that they would suffer direct financial loss if the insured died.

 Creditors may insure their debtors, business people may insure their debtors, business people may insure their partners or key employees, and husbands and wives may insure one another.

 Courts frequently rule against adult children having insurable interests in their aging parents.  Brothers and sisters ordinarily do not have insurable interests in each other.

 Unlike property insurance, the insured has to demonstrate only an insurable interest at the time the policy is taken out, not at the time of the death of the person who’s life is insured.

 Calvin Coolidge, 13 th president of the United States from said:  “Insurance is part charity and part business, but all common sense”  Write a 500 word essay about this quote.  Explain in detail what President Coolidge meant.  You may use the internet to complete research as needed, you may not plagiarize.