Insurable interest in insurance

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

For the conclusion of any contract, it is necessary that the final results of the agreement satisfy all interested parties. The insurable interest lies precisely in reaching the required compromise. The insured person simply understands that in the event of an unforeseen situation, the insurer will necessarily pay the agreed financial compensation. How is insurable interest determined in insurance and what does the Law say about this?

First explanations of insurable interest

The first theories about the coincidence of insurance interests were developed in England. Thus, Judge Lawrence determines that an insurable interest arises if there are circumstances related to the subject of interest that may change this subject or its characteristics. Insurance is designed to minimize the damage caused by circumstances and provide monetary compensation to the injured person. Thus, if there are no circumstances that may affect the characteristics of the insured item, then there is no insurable interest.

Classical theory of insurance law

Easier this idea is expressed in the classical theory of insurance law, and it belongs to the famous economistEhrenberg. He calls the insurable interest interrelated relationships, by virtue of which the related person may suffer a material loss. There are other definitions, but in general they express the same idea: there is no insurance contract if there is no interest in such an agreement. Hence the conclusion follows that the interest of insurance companies lies in the fact that the insured event in relation to the insured good does not occur. For the insured person, this interest is not so pronounced and boils down to the following:

• if an insured event occurs, he will be reimbursed;
• if the insured event does not occur, he will still have this or that benefit.

Value of insurable interest

In insurance law, the following explanation of insurable interest is common:

• It determines the very principle of material protection against unforeseen circumstances.
• Defines all the important elements of an insurance liability. Among them are the object of insurance itself, the subject composition, performance and liability of the parties.

It should be added to the above that it is the insurable interest that determines the maximum amount of compensation that the policyholder can count on.

How does it work?

Protection of insurance interests consists in material compensation for the risks that the object of insurance may face, after which its characteristics will change. For example, CASCO car insurance obliges the insurance company to reimburselosses caused to the car as a result of an emergency, natural disaster, traffic accident, theft or complete destruction. Here the insurance interest is, in fact, the car: both participants in the transaction are interested in its integrity and safety - both the car owner and the insurance company. Circumstances play against them. If circumstances have not changed the characteristics of the car by the end date of the policy, then both parties can breathe easy. But if the car was stolen or destroyed, then the insurance company will protect the interests of the owner of the car, financially compensating him for the loss of the car.

Insurers and crooks

Unfortunately, the interests of owners and insurers do not always coincide at the stage of signing the policy. Numerous cases of insurance fraud force insurers to look for other options for conducting their business. For example, a recent scandal with insurance companies over the refusal to sell OSAGO insurance was caused by the actions of auto lawyers who worked together with scammers. Arranging fake accidents, they extorted so much money from insurance companies through the courts that they even suspended work in certain regions of Russia. It took a series of federal measures to reduce the losses incurred by insurance companies. Therefore, one should not be surprised that insurers try to protect their interests as much as possible and use all acceptable methods for this.

Insurers tricks

Turningto the insurance company (IC) for a legitimate payment, the policyholder is often faced with numerous tricks of the insurance company's lawyers. The classic cases of incorrect (to put it mildly) behavior of representatives of the UK are:

• An offer to sign a consent to compensation without an examination. Having received 1/10 of the requested amount, the victim goes to court, where he is shown his own consent. The court, accordingly, refuses to consider the case.
• An offer to inspect the damaged property from experts of the UK. As a rule, "lured" experts give a very low amount of damage. By signing the act of examination, the victim automatically agrees to the meager amount allocated by the insurance company. The court will be forced to refuse to satisfy the claim, since the victim previously agreed with the preliminary sum of the damage caused. He confirmed his consent with a signature.
• The original accident notice is “accidentally” taken away from the victim in an accident, without making a copy. The original is lost and the victim cannot receive compensation due to the absence of this document.
• After filling out an application for an accident, the victim was waiting for payment for several months. During this time, he repaired the car himself. He was denied payment, as representatives of the UK considered the pretext for applying for compensation far-fetched. The car owner did not have any photos from the scene of the road accident, the damaged car, and the accident notice.
• Under the terms of CASCO, the insurer does not compensate for the loss of wheels, if other parts of the car were not damaged. If the clientDoes not declare in writing to the police and the insurance company that his car was damaged, the CASCO payment will be denied.

How to protect your interests

This is just a small part of the tricks that victims have to face when contacting an insurance company. If you are confident that you can protect your rights, and are ready to spend time and money on this, feel free to fight. The rest are strongly recommended to seek help from a law firm and entrust the representation of interests in the insurance to professionals.

Lawyers and insurance companies

Representation of interests in an insurance company has long turned into a special kind of business. As a rule, the victim does not play any role here - the main actors are the representatives of the victim (traffic lawyers) and the agents of the insurer. Representation of interests in an insurance company is a speci alty of many law firms. Both sides have intimate knowledge of the insurance laws and are able to fight as equals in the courtroom.

Lawyers are able to carry out the correct procedural actions, organize an independent examination and defend the insurable interest of the car owner in court. The cost of professional services is fully compensated by the money sued from the insurance company. In order for lawyers to take over the case, a power of attorney must be issued. The interests of the insurance company will protect itself, but the victim should be sure that with the help oflawyer, he will definitely receive the money due to him.