To have insurable interest, what must an individual have?

To have insurable interest, an individual must have a chance of suffering a financial loss if a covered event occurs. Insurable interest is a key principle in insurance that ensures a policyholder stands to lose financially from the damage or destruction of the insured item, thereby justifying the need for insurance coverage.

For example, if an individual owns a home, they obviously have insurable interest since a loss to that property would lead to a financial setback. However, even if someone does not have legal ownership of a property (as indicated by legal title), they may still have a financial stake in it, such as through a lease, partnership, or shared interest, meaning they could suffer financially if something happened to it.

Other options may reflect ownership or contractual aspects related to insurance, but the fundamental requirement for insurance is the potential financial loss associated with the insured risk. Thus, just having ownership or a legal title doesn't automatically imply insurable interest unless there is a corresponding risk of financial loss associated with that ownership.