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Insurable Interest: What’s In It For You?

Insurable Interest: What’s In It For You?

Insurance can be a big expense for businesses or individuals. However, some may choose to insure everything (or everyone) that they can in order to protect themselves financially. The main thing to remember if you are looking to purchase any type of insurance is a concept called “insurable interest”. What is it, and do you have it? Let’s find out. Why Does Insurable Interest Matter? The basic tenet of insurance is to “make whole”. For example: If you own a home or a building and you lose it in a fire, then insurance will pay to replace it. That will make you whole again – by replacing your building or home so that you once again have a place to work or live. Of course, there are other things that factor into it (coinsurance, depreciation, etc) but the main idea of making a person or business whole again is that you’ve lost something you owned or had an insurable interest in. What Can You Insure? Just about anything can be insured by anyone. You can get life insurance on your spouse and children. You can insure your home, your business building, your personal and company vehicles.  You can purchase life insurance on someone other than a spouse or child. You can even insure buildings you don’t own.  For example: let’s say you’ve run out of storage space in your house. Your next-door neighbor lets you store some of your belongings in his backyard shed. You decide that since your stuff is in the shed, you’re going to purchase insurance on the shed and the contents. The shed gets struck...