A part of the policy that explains how losses will be paid out in a claim. It makes sure that any payout covers the loss without leaving you with extra costs.
What to consider
Ensure you have a legitimate financial stake.
Understand the requirement for obtaining coverage.
Verify documentation to support your claim.
Real world scenarios
Before purchasing home insurance, Mark had to prove he owned the property to have an insurable interest.
A business owner shows insurable interest by proving ownership of equipment before getting insurance.
A family ensures they have insurable interest in a relative's life by demonstrating financial dependency.