On The Property Insurance Insurable Interest

As the rapid progress of social economy and the completion of the system of socialist market economy in China, people own more and more property. With the more and more advanced goods production and trade, the property insurance has been paid much more attentions in various respects of social economy and people' s life. As a result, disputes in the property insurance increase gradually, among which cases concerning insurable interest account for a high percentage. But provisions concerning the insurable interest of property insurance in the Insurance Law of our country have many defects and disadvantages, which brings random to the judicial practice concerning insurance and is harmful to solve the disputes and to develop the insurance industry. This paper tries to research on the substance and functions of the insurable interest in property insurance on the basis of the combination of basic theories of insurable interest in property insurance and judicial practice. Besides the preface and conclusion parts, the paper probes into the insurable interest in property insurance from the following five aspects: First, a general introduction to the insurable interest of property insurance, which analyzes the important conditions for the insurable interest of property insurance include calculability in economy, certainty, lawfulness, and the functions of the insurable interest of property insurance mainly include avoiding the occurrence of gambling, avoiding the occurrence of moral risks and defining the limits of damage compensation to avoid unjust enrichment. Second, subjects of insurable interest of property insurance. Talking about attribution of the subjects of insurable interest of property insurance, the author is on the side of the insurer. Talking about the types of the subjects of insurable interest of property insurance, the author thinks there are three important types: persons who have legal rights, include the property owner, shareholder and possessor; persons who have legal liability; persons who enjoy rights and interests because of valid contract; persons who have future interest in fact. Third, validity in time of the insurable interest of property insurance. In this part, the author discusses several schools of ideas and thinks that if a person has the insurable interest when the insured event happens, the insurance contract is valid. Fourth, alteration of the insurable interest of property insurance includes three types: transfer, disposal and extinction. The Transfer of the insurable interest can be divided into legal transfer and contractual transfer. Legal transfer mainly covers succession and bankruptcy. The author thinks that legal transfer is a kind of automatic transfer, which needs no more alteration procedures in entering a valid insurance contract. Contractual transfer is caused by the transfer of the subject matter of the insurance. The paper has introduced several legislative models at present, such as doctrine of observing the property, doctrine of observing the person, and the compromise doctrine. The author favors the principle of transfer and notice in the doctrine of observing the property among all the legislative models. Disposal of the insurable interest mainly refers to the disposal of the insurable interest by co-owners and copartners. The extinction of the insurable interest involves extinction because of the occurrence of insured events and extinction of the subject matter of the insurance. Fifth, softening in the system of insurable interest of property insurance. As the development of the social economy, the principle of the insurable interest of property insurance become softening. For example, softening in the subjects of insurable interest can be proofed by the acknowledgement of the insurable interests of the bona fide insured. Softening in the alteration of the insurable interest can be explained by the policy that transferees are justifiable to possess insurable interests if they have economic interests with the subject matters in fact and the economic interests are not forbidden by the law and social ethics. Softening in the insurable interest in judicial practices can be supported by the facts that the court tries to seek or explain the insured interests to prove the validity of the insurance contract in the view of the economic victims in the insured events on the basis of the principle of utmost honesty and credibility. Last, the author thinks that the system of insurable interest of property insurance will be perfected as the development of the social economy and insurance industry, although there are still all kinds of problems in its theories and practices.