Insurable interest

Insurable interest requires that the policyholder or insured person have a real stake in the non-occurrence or occurrence of the insured event. The concept prevents insurance from becoming a wager and helps define the legitimate scope of cover. In Swiss law, the issue appears through rules on who may insure what, the distinction between indemnity and fixed-sum insurance, overinsurance and moral hazard. Its function differs by line: property insurance usually requires an economic interest, while life or accident insurance may involve personal relationships and beneficiary designations.