IS INSURABLE INTEREST APPLICABLE

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IS INSURABLE INTEREST APPLICABLE

Hi

Is Insurable interest applicable if the Legal Registered Owner of a vehicle that is paid in full, gives the vehicle to another person, his father, who does not reside at the same address.

His Father Insures the vehicle because he uses it daily for the last 6 years but the legal ownership at the license office is never changed.
Can the insurance company reject, the insurance claim, in the vent of a total loss because the father whos policy it is has no insurable interest?
Doesn’t the father have insurable interest since the assess is in his possession and he uses it daily, and would need to replace it if its gone?

Asked on April 8, 2016 under Insurance Law, Alaska

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

No, the father does not have an insurable interest because he is legally not the owner. Use does not give someone an insurable interest: for example, consider a tenant in an apartment building--the apartment is his home, and he lives there everyday; but he cannot insurer the building (only his own belongings) despite his use and his need for the apartment, because he does not own it. It is the same in the situation: neither the father's use nor his need create an insurable interest.


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