In all types of insurance, insured must have insurable interest both at the time of insurance and at the time of loss.

Introduction:
Insurable interest is a fundamental principle in insurance that ensures the policyholder has a valid reason to insure the subject matter of the policy. It refers to the financial or pecuniary interest that a person has in a property or life that is being insured. This principle is applicable to all types of insurance, and it serves as a basis for the legality and enforceability of insurance contracts.

Insurable Interest at the Time of Insurance:
At the time of insurance, the insured must have a legitimate interest in the subject matter of the insurance policy. This means that the insured should stand to suffer a financial loss or have a potential financial gain if the subject matter is damaged, destroyed, or lost. Without insurable interest, the insurance contract would be considered a form of gambling, where the insured is simply betting on the occurrence of a specific event without any legitimate interest.

Importance of Insurable Interest at the Time of Insurance:
1. Legality and Enforceability: Insurable interest is crucial for the legality and enforceability of an insurance contract. It ensures that the contract is based on genuine economic considerations rather than speculation or gambling.

2. Prevents Moral Hazard: Insurable interest helps to prevent moral hazard, which refers to the increased risk-taking behavior of the insured due to the presence of insurance coverage. Insurable interest ensures that the insured has a genuine interest in protecting the subject matter and will take necessary precautions to prevent losses.

3. Avoids Adverse Selection: Insurable interest also helps in avoiding adverse selection, which occurs when individuals with a higher probability of making a claim are more likely to purchase insurance. Insurable interest ensures that only those with a legitimate interest in the subject matter seek insurance, reducing the risk of adverse selection.

Insurable Interest at the Time of Loss:
In addition to having insurable interest at the time of insurance, the insured must also maintain that interest at the time of loss. This means that if the insured no longer has a financial interest in the subject matter at the time of the loss, they cannot claim the insurance proceeds.

Importance of Insurable Interest at the Time of Loss:
1. Prevents Fraudulent Claims: Requiring insurable interest at the time of loss helps prevent fraudulent claims. If the insured no longer has a financial interest in the subject matter, they may be tempted to intentionally cause a loss or make false claims to receive the insurance payout.

2. Maintains Fairness: Insurable interest at the time of loss ensures fairness and equity in insurance transactions. It ensures that only those who have a genuine interest in the subject matter are compensated for their losses, while preventing others from taking advantage of insurance for personal gain.

Conclusion:
Insurable interest is a fundamental principle in all types of insurance. It ensures the legality and enforceability of insurance contracts, prevents moral hazard and adverse selection, and helps maintain fairness and integrity in insurance transactions. Both at the time of insurance and at the time of loss, the insured must have a legitimate financial interest in the subject matter to claim insurance proceeds.