Insurance interest under the law of England

Abstract

The article is devoted to one of the elements of the insurance contract. The author notes that the doctrine of insurable interest was developed in England in the middle of the 18th century. The classic definition of insurable interest in property insurance is contained in a court judgment. Initially, insurable interest was an “economic interest” — a real and expected possibility of property damage due to an insured event. It was first legislated in the Marine Insurance Act of 1745. In the 20th century, the Marine Insurance Act of 1745 was replaced by the Marine Insurance Act of 1906. A new definition of insurable interest was given. In addition to the economic interest, the insured had to prove a legal interest, namely the existence of a legal or equitable relationship to the object of insurance. Further, the article discusses the types of insurable interest. Thus, depending on the source of fixation the insurable interest can be statutory and contractual. It is noted that the Law Reform Commission is currently preparing amendments concerning insurable interest. Most members of the Commission are inclined to the position that the requirement of insurable interest should be removed from English law in property insurance contracts. It is also important to note that insurable interest in English law is not considered as the subject (object) of an insurance contract — the works of scholars speak about the subject of insurance.