Question

Insurable interest exists only when a number of condition are met. Which of the following is NOT one of the requirements for insurable interest?

A. The applicant must face a risk of loss.
B. The applicant must have an interest in protecting what is insured.
C. The applicant must not have a potential for gain because of the insurance.
D. The applicant must not share the interest with anyone else.

Answer 1

The requirement that the applicant must not have a potential for gain because of the insurance is NOT one of the requirements for insurable interest.

Step-by-step explanation:

The correct option that is NOT one of the requirements for insurable interest is C. The applicant must not have a potential for gain because of the insurance.

In order for insurable interest to exist, the following conditions must be met:

1. The applicant must face a risk of loss.
2. The applicant must have an interest in protecting what is insured.
3. The applicant must not share the interest with anyone else.

Therefore, option C is not one of the requirements for insurable interest.